Tilly Franklin – Endowment Model at Cambridge University (EP.363)

26:33We were always thinking about what can we actually do to just bring people together all the time so that everybody can get to know each other. So part of that was organizing workshops around things like what are our values as a team? What are our investment principles? What are our norms as an organization? So that had the double benefit of helping us to crystallize our values and our norms, but also just literally spending tons of time together discussing things that weren't necessarily related to the day-to-day of do we want to underwrite this manager or not and that kind of thing. What's the structure of the team today?

27:06We have a reasonably small team. There's 18 of us, 10 on the investment side and eight operations colleagues. And our investment team is primarily based here in London, our operations team primarily in Cambridge. Then within the investment team, we have one senior colleague who's focused on leadership of each of the major asset classes, and then a pool of wonderful investment analysts that are more generalist, bit of specialization, but they spend a lot of time also working across the whole portfolio. How do you think about the benefits and drawbacks of specialists versus generalists on the team?

27:43I know that this has been hotly debated and a lot of organizations have gone down the more generalist route over the last five to 10 years. Perhaps that's more difficult for me to contemplate because I do come out of such an asset class specific background. Not only was I a PE allocator. I also worked in PE directly for almost a decade. And so for me, I feel so much of our job is about pattern recognition. And so if I want to appoint, let's just say a PE manager, because that's my background, it's really hard to do so if I haven't seen all the other PE managers that there are that could potentially fulfill a similar function in the portfolio.

28:25So I am a big fan of specialization, but only if it's combined with a lot of cross asset class communication. And that's why it's really important for me that every single investment team member is involved throughout the decision making process so that everybody's aware and everybody gets a chance to learn as well. One thing that was really a tremendous benefit of my time at Alta was that all of the entire team were encouraged to meet any fund manager whenever they were in town or whenever we went on trips. So even though my role was primarily focused on PE, I managed to pick up a lot of information about other asset classes, other strategies, other organizations, other managers during my time there.

29:09So as we dive into the portfolio, I'd love to circle back of the history of this pool of capital. And then you think of Oxford and Cambridge as the equivalent of some of the, say, Ivy League institutions in the US, and yet these pools are a lot smaller. How did that come to be? I'm not sure exactly what happened over the last 800 years or so, but Cambridge was founded in 1209. It's one of the oldest universities in the world. Its endowment was only brought in-house around 2008. It was about a billion pounds. Team was set up, as I mentioned before, did really, really well managing that capital over about a decade.

29:46It is a bit of a mystery why the UK endowment pools are so much smaller. But I think actually, one thing to remember is that for a large period of history, education at university level here in the UK was free. Tuition was free. So for example, when I went to university, there was no charge for tuition. There is one now, but it's capped at£9 ,250 a year, you would think that if something was free, people would value it immeasurably. But actually, I think in terms of philanthropy, people tend to want to give when something's actually very inaccessible from a cost perspective. So I think that there's a mindset shift that's going on at the moment in terms of philanthropy and giving to British universities.

30:32So as you stepped in, you were familiar with this endowment style portfolio, Leo, you mentioned diversification away from equities. Where are the places where when you wanted to impart your views on how to manage a pool of capital like this, it was a little bit different from maybe what you saw at Alta? That's an interesting question. I have to say, I have brought a lot of the thinking from Alta with me. I'm not sure that the asset allocation actually is tremendously different from what we had there. I think one thing that works potentially in our favour is we're much smaller. There are benefits to being small.

31:08There are also obviously benefits to being large. But we are able to be very concentrated as a result of that. We are also able to access fund managers that might have smaller funds or be a bit earlier in their life cycle because we don't necessarily need to allocate a tremendous sum in order for it to be really meaningful to the endowment. I think what's actually perhaps more interesting in terms of differences are some of the perspectives that my colleagues brought. So I have colleagues from very different types of investment organisations, given that there isn't a really established endowment and foundation community here.

31:53So my colleagues come from other family offices, from outsourced chief investment offices, from pension consultancy, and also from direct security selection roles. One of my colleagues in particular is really focused on every manager having a very specific role to play in the portfolio. Another of my colleagues is very focused on having a very disciplined investment process. And I tend to be very focused on the people and whether or not the fund managers have a very particular insight into what they do that's going to allow them to potentially outperform over time. So I think what's perhaps most interesting is the fact that we all come at it from a very different place, which actually gives me a lot of confidence that if we all agree and get excited about something, it's hopefully quite likely that is going to be successful.

32:47I'd love to pick apart some of that. I guess, just at a baseline, where did you end up in terms of your asset allocation today? I don't think our asset allocation is by any means the most interesting thing about us. I think it's probably fairly typical. We have about 40 % in equities, about 25 % in private equity, 20 % in what we call absolute return, which is a sort of more market neutral subset of the hedge fund universe, and then about 10 % in real assets and the rest is cash and fixed income. So definitely not going to set the world on fire with that asset allocation. And the concept of a discipline process sounds great.

33:25When you go in and look at a manager, what are the aspects of what you consider important in terms of the discipline of that process? It really is what you just said, the discipline. I think people can have really different investment processes. But what's really important is whether they actually stick to it. So what is a real red flag for us is if we see things just creeping into the portfolio because a particular opportunity just happened to pop up. I think what's also really interesting is trying to bottom out when something's gone wrong, why was that? And I think if it was an investment where the manager followed their process in a very disciplined way, but then maybe an exogenous event occurred or something completely unforeseen hit them in that position.

34:14That's one thing. But if something went wrong just because it was a departure from the usual process, that would again would be a really big red flag for us. But I think probably the number of different investment processes that we see in the portfolio is as numerous as the number of fund managers. We're going to take a quick break in the action to tell you about SRS Aquium. Want to make sure your M &A processes aren't stuck in the past? Partner with a company that's been defining the future of dealmaking for nearly two decades instead. When it comes to M &A innovation, SRS Aquium has reshaped the way that deals get done, streamlining processes for maximum efficiency and minimum headaches.

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36:00I think that was actually something that we saw a lot during COVID. A number of our managers really retooled their processes to be able to take advantage of the volatility in prices. Perhaps people who had invested previously in more traditional industries suddenly really realized that the virtual world was upon us in an accelerated way and started thinking much more about the implications of technology on their underlying positions. I think the portfolio actually really bifurcated quite a bit at that time into people who were really racing to adapt their process to these different types of criteria.

36:40Also, of course, to the fact that we were all working remotely by comparison to some others who were doing exactly the same thing that they had done before. But I think what's really important is that evolution has to be done in a considered way, right? Rather than just randomly experimenting with different things. Of course, we need to experiment with things. That's the only way we can change, but it needs to be done in a considered way and probably for the most part in a more incremental way when you're talking about investing large sums of capital. You mentioned your evolution back to this focus on people from the venture world, private equity, and now back.

37:17How do you think about assessing people? it's really hard i'm not sure that i have a magic answer to that it's really about just spending time with people in different contexts asking different people in the organization the same question or asking the same question in different ways having different members of our own team meet in different contexts i do really think it's important to understand in some detail the motivations of the key people, their investment philosophies, in particular, what's shaped their investment philosophy over time. In discussing that, of course, you can evaluate how they have evolved in their thinking, how they've learned from what's gone well, but also critically, how they've learned from their mistakes.

38:09I think we all learn a lot more from what's gone wrong than from things that go well. So I think, yes, an ability to reflect on those things is really important. And I think where possible, trying to meet the individuals outside of a business context to actually get to know them as people as well is important to us. When you result in what's ultimately a concentrated portfolio, somewhere along the way, you have to make that incremental decision about this person or this team you'd like to back compared to the next one that you almost would like to back. When you come out of that meeting, Let's say it's someone you're down the road with, it's a new manager, and the spark goes off that instinctively through your research, this is someone you really want to partner with for the long term.

38:54What are the things that caused you to feel that way on the margin? We're only really just getting to that point of more sort of steady state in the portfolio because there has been quite a lot of evolution over the last few years, just given the change in our asset allocation. For me, it would really be that person's level of insight into their opportunity set and whether they bring something really different to their evaluation of a particular investment type. So it would be the insight combined with their real passion and dedication to that. We will have very intense debates about these things among the team, given, as I said, one of my colleagues is very focused on role.

39:40So when we actually evaluate managers, we have two different axes, role and conviction. Whereas if it were up to me, I'd probably be more inclined to fill up the portfolio with managers where I had high conviction, which is a really fun and interesting, I think, way to stress test the ideas and the potential opportunities that we see. I'm curious about the lens of time in manager selection decisions, meaning when you're at Alta, you had an established portfolio over time that had competition for capital. And then you're building at Cambridge the last couple of years into the asset classes. On the margin, is there a difference in the manager that you choose to put in the portfolio at Cambridge in terms of where that bar is as you're growing your exposure to an asset class compared to what it may have been at Alta when you already have a portfolio that you have conviction in?

40:33Maybe, although when I started at Alta, the portfolio wasn't as established as it was when I left. So in some ways, it feels a bit more like going back to the beginning rather than something completely different. But no, I don't think we would put something in the portfolio just to fill a role. Every manager in the portfolio is a high conviction manager. remember that we weren't coming at it from a standing start. Almost all of us came from the allocator world, albeit in different guises. So we were fortunate that we brought a tremendous number of relationships with us. And we've complemented those with new managers that we've met also over the last four years.

41:18What have you found that's different or unique about this organization, Cambridge University, than the places you've been exposed to in the past? Quite a lot of things, actually. Firstly, one thing that may be different about Cambridge relative to a US endowment is that we actually have quite a large number of discrete investors. So Cambridge is a collegiate university. There are 31 different colleges within it. And each of them has their own endowment. And they are completely independent in terms of whether they choose to invest those endowments with the central pool that we manage or do something completely different.

41:56So as of now, we have 21 individual investors. In addition to the portfolio management aspects of what we do, there's also an investor communications element to it. We also have a complex group of stakeholders. So not just those who actually oversee those capital pools, but of course, many other constituents are also our stakeholders, students, faculty, professional staff, alums. So that has been very different for me. And I've actually found I really enjoy working on our stakeholder communications. Another thing that is maybe different is our currency situation. So we obviously, we're a British university, all of our liabilities are denominated in sterling, but our investment opportunity set is global.

42:46So we have to manage that in a sensible way, hedging back the majority of our assets to sterling, but without hedging to the extent that if there's a disconnect in currency movements, we would have an unmanageable settlement liability. So that's something that we spend quite a bit of time on, which is very important. We approximately have, this isn't exact at all, but approximately a third of the portfolio is in sterling-related opportunities are just over a third in dollar-denominated investments, and then the other just under a third is other. And we have a policy of hedging back to 60 % sterling exposures.

43:28We just arrived at that level based on a Pollyanna-ish piece of analysis that tried to figure out what was the best way to have an appropriate level of sterling purchasing power without exposing ourselves to these large settlement liabilities over time. I'd be remiss if I didn't ask for your perspective on private equity and maybe credit as well related to private credit in these markets. I'm still a big fan of private equity. I feel that it has a very effective governance model. So for those fund managers that are actually able to work with and through their portfolio companies to build better businesses, they should still be able to do really well in any economic environment.

44:16We have had a lot of questions recently about people are coming out of PE and what does that mean for our asset allocation, which still includes plans to increase our exposure to private equity. But actually, I think if other people are coming out of the asset class, that should be a net benefit because perhaps it will become a little bit less competitive than it has been over the last decade or so. So one important supporting fact in what I've just said is that we definitely aren't looking for managers that seek to create value through leverage. So we actually looked at the leverage level of our underlying buyout portfolio.

44:57And that analysis showed that the leverage in our buyout portfolio was actually lower than the leverage in the Russell 2000. So it's not focused on highly geared strategies. It's focused on very fundamentally driven strategies. And so I'm still excited about that. Bearing in mind, we only have about 20 private equity management portfolios. So it's a small subset of the available universe. Private credit for me is less of an area that we're focused on. We do have some private credit exposure that was in the portfolio before I arrived. And that's still rolling off. And some of those investments have done well.

45:32But if we're going to use up what we think of as a sort of illiquidity budget, I'd rather be in an asset that offered the potential for uncapped returns over time. Of course, not all of them are going to achieve extraordinarily high returns, but I don't want to use that illiquidity budget for a sort of potentially capped level of upside. One of the common critiques of private equity currently are this idea that the marks are too high. How have you thought about the various incentives at play that lead to current private equity marks, the implication for denominator effect and allocations in the portfolio?

46:12I think we maybe need to differentiate between the different sub-asset classes. So I can't speak for the industry as a whole, but within our buyout portfolio, the valuation marks are lower than the Russell 2000. So that's the benchmark that we think is most analogous. I think within venture and growth equity, it's obviously just much harder to analyze. And of course, one phenomenon is that people do observe different managers holding the same position to have it marked differently. Our portfolio is quite concentrated, so we didn't see that so much within our own portfolio. But the venture and growth equity marks, I think, are harder to get the same level of comfort with.

47:02I suppose what we do take comfort from is that they have significantly reduced during 2022. And then even though this year we've seen a significant rebound in public equity valuations, and particularly in tech, we haven't seen that same rebound flowing through at all into the private marks. It's too early to say what's going to happen in Q4. But even through Q3, we didn't see marks being reflated. so that gives me some comfort but it's still something that we're watching really closely. You've mentioned a concentrated portfolio how does that break down in terms of the number of managers? You have about 60 active relationships with fund managers ideally we might like it to be even more concentrated but it's just difficult when you're trying to access a wide range of different strategies and then particularly within an area like venture you might struggle to get your target allocations and that kind of thing.

48:00So I think around 60 is a good number for us. You mentioned in some of the real assets, you have some direct assets. What are the aspects of the totality of the portfolio that you've chosen to do internally? I perhaps shouldn't have put it quite in that way. It's primarily within real estate. So rather than us going out and selecting real estate assets, which we're completely ill-equipped to do. What we've set up in a number of areas are a fund of one structure where we're still working with an expert third-party manager, but we're just the only investor in that vehicle. And the rationale for that has really just been that we're very long-term and we don't want the manager to be forced by a sort of fund structure or a very onerous fee structure to be forced to take on too much risk and then have to sell assets at the wrong time, which is something we really observed in real estate going through the financial crisis.

49:00So these are open-ended vehicles. The manager still has a relatively high level of discretion within a tightly defined opportunity type that we've agreed. And then once we are invested in the assets, we can hold them for as long as we mutually decide is appropriate to the value creation plan. How have you thought about that same dynamic in private equity? That's a really interesting question because one thing that I saw a lot towards the end of my time at Alta was a subset of fund managers actually coming out with much longer duration vehicles. So instead of the classic 10-year life, we were seeing vehicles with a 12-year life, a 15-year life or whatnot, or even in some cases, as an evergreen structure.

49:47I think those are appealing. Frankly, very few private equity funds actually have a 10-year life, as we all know. So let's stop pretending that's the case. But it obviously requires an even higher level of due diligence, alignment, confidence in the partnership, and so on. You mentioned the importance of sustainability in the pool. How have you addressed sustainable investing? That's been a hugely important part of our work over the last four years. And I think the student community has really pushed us on in our thinking there. So the core element of our sustainable investment approach is an ambition that we've expressed to achieve net zero greenhouse gas emissions from the portfolio by 2038.

50:36That might sound like a slightly odd date, but it's basically been chosen because the university itself has an ambition to decarbonize its own operations by that date. And what does that mean? We look at sustainability across the entire portfolio. So there's not one carve out for impact investing or environmentally related investments. And our overarching thesis is that society as a whole has to make a transition to net zero over the next several decades, if life as we know it is going to continue. So essentially, what that boils down to is we need to be able to produce the same unit of economic activity with fewer emissions over time.

51:22So when we think about our portfolio, it makes sense to us that a company that's a more efficient consumer of emissions, shall we say, within its business activity over time as a long-term investor is likely to be more valuable than its peers who were less efficient. And so on that basis, we are very focused on engaging with all of our fund managers, not just a subset of them, about how they in turn can work with portfolio company management to reduce emissions from their underlying holdings over time. And we're very fortunate in that it's not just us telling people to do that. Of course, we couldn't tell them what to do anyway, since they're discretionary fund managers, but we're able to bring the academic resources of Cambridge University, which is one of the world's leading centers of climate science and sustainable finance as well.

52:17And we've actually developed an executive education course with the university that we are inviting our fund managers to attend. What are some of the insights that generally come out of that course that a fund manager will learn they may not have known before? Probably the most important one, which we see again and again is a realization that any asset owner can actually be a positive part of the transition. I think there's a real tendency to feel quite powerless in the face of this climate emergency. But I think one of the really central tenets of the course is don't let the great be the enemy of the good.

52:53Just because you're not 100 % sure on how your portfolio company can get to net zero today, that doesn't mean that you can't take a step, for example, by If it's a software company, make sure that its data centers are powered by renewable energy, or if it's a transportation company, replace incremental vehicles with electric vehicles, or very simple, straightforward steps that can be taken. And then I think a related insight is that in some sectors, very often there is actually a win-win, thinking about this concept of being efficient with your emissions. If you're, for example, going to use up less energy to achieve an area of activity, it's going to cost you less.

53:34Or if you are going to recycle waste materials, you may need to purchase fewer raw materials or things like that. I think increasingly, we believe, and I think we're seeing many other investors believe that the environmental and financial aspects of sustainability are coming into alignment. How do you measure it on a year over year basis, that progress towards those targets? Measurement is a really thorny area, as I'm sure you know. So we measure the emissions from the portfolio as best we can. In the public equity portfolio, it's the most straightforward because we can buy a database and put our portfolio into the database and measure it that way.

54:16Within private equity, we are increasingly seeing our fund managers starting to measure emissions. Obviously, they would then have to do that themselves. There are many software and other tools and consultants that can assist. So in 2022, only one of our PE managers actually measured and reported emissions, whereas in 2023, there's going to be seven. So it's still less than half, but it's seven times increased. So that's really encouraging. On the real asset portfolio, we have a very concentrated portfolio and some of those assets are actually directly held by us. So we've been able to work with our managers there on an individual basis to get those measurement numbers in place.

54:59And then I think the most difficult area is clearly in the hedge fund arena, because there still aren't agreed protocols for how emissions should be measured. For example, if you have long and short holdings, should you measure emissions on a net or gross basis? That is still TBD. Or for example, what are the emissions associated with a US Treasury bill? So there's plenty of unanswered questions in that part of the portfolio, which we're actually working with some of our peers to try to bottom out. But in the meantime, yet we measure every year and we're tracking that over time. But of course, it could be quite volatile.

55:38It's not necessarily going to go on a straight line path because fund managers are coming into positions and out of positions over time. And because our portfolio is quite concentrated, relatively subtle movements could affect those measurement stats. How did the goals of sustainability and emissions reduction factor into the decision you might make about adding a particular new manager into the portfolio? We definitely don't expect a new manager to necessarily be focused on these issues, the point of investment. I think many of our managers are quite small boutique type fund managers. I think what's really important to us is that the manager is receptive to these discussions.

56:27And we think of it as being prepared to come on a journey with us. So we do start talking about this philosophy pretty early on in the discussions with a prospective manager. And it's not that difficult to see whether they have an interest in learning more about it or whether they don't at the end of the day. So that's the primary gate. What areas of opportunity are you most excited about then? It's hard to say because I don't tend to look at the portfolio from a very top-down perspective. I tend to look at it very bottom-up. So I'm pretty excited about all the fund managers, otherwise they wouldn't be in the portfolio.

57:06I think in terms of sort of areas that we're investigating or researching right now, like many other people, we're interested in diversifying some of our emerging markets exposure. So we're currently actively looking at managers in Southeast Asian equities. I think that those markets are really growing. They're becoming deeper, much more investable from an institutional perspective. Completely different area that we're interested in is looking at nature-based solutions. So we've recently just got over the finish with a commitment to an agricultural forestry fund, which has benefits of underlying demand for its products, but then also potentially ancillary benefits of generating carbon offsets.

57:53And I think the opportunities in nature-based solutions is really fast growing. So we're going to be spending time in 2024 trying to understand that in more detail. On the former, how have you thought about risk in China? I think about that probably more than any one single thing, other than perhaps thinking about the team. I've recently been to China a couple of times, actually, for different events that were hosted by some of our fund managers. We had been feeling very concerned about the geopolitical risks in particular. I came out of those trips still feeling reasonably cautious, but definitely feeling very encouraged by the level of growth in certain sectors of the Chinese economy.

58:42I think when we look at the overarching stats, it seems to be a very gloomy picture. But there are quite a number of industries where China is really booming, particularly in the whole energy transition supply chain, which is an area that we think about a lot, partly as a business opportunity also in relation to our sustainable investment agenda. Also, the healthcare industry in China is very innovative, very rapidly developing. So I think the picture is very much more nuanced than we hear about from a sort of high level. And then I think in terms of the relationship between the US and China, there seem to be some shoots of optimism there, but I certainly wouldn't profess to be an expert in that area.

59:26So generally speaking, I think we are cautious, but feeling more optimistic than we may have been, say, a year ago. And I think a big part of that is actually just being able to travel to the region, which obviously wasn't possible until quite recently. Alongside your sustainability efforts, you've put in a fair amount of time thinking about diversity and would love to talk about the work you've done in that area. Diversity is an area of particular interest to me as, on a personal basis, as a woman in investment management, we're a relatively small minority. I think in the UK, less than 25 % of investment professionals are women.

1:00:02And then as you get to a more senior level, it shrinks to a smaller percentage. One of the things that I've done in that area is actually with a number of friends and colleagues from the industry here, we founded a charity called GAIN, which stands for Girls Are Investors, which tries to encourage more young women to get into investment management as a career. What does GAIN do? Gain was really founded based on some observations that I had in my prior role where at certain points I was responsible for graduate recruitment. And we had the very admirable aspiration to have a 50-50 gender balance in our graduate recruitment.

1:00:43But over time, when we actually looked at who we'd recruited, it was more like one in five of the analysts were female. So being a sort of analytical person, me and one of my colleagues went back and looked at all the applications that we'd ever had. And what we realized from that was that actually only 20 % of the applications were from women. So we were actually hiring exactly in line with the application rate. But what we needed to do was get more young women to apply in the first place. so that was the light bulb moment when we thought well we need to do something to actually encourage these people into the door in the first place so part of that was just going out and interviewing groups of high school women and undergraduate women about what do they know about investment management was it something they were interested in and what transpired was that a they hadn't the faintest idea what it was and what it was about and why they should even be interested in it in the first place.

1:01:40And B, if by some miracle they were interested in it or had heard about it, there were no role models for them to see. What GAIN tries to do is to get female investors in front of young women at a very early stage, so actually when they're still in high school, and to give a very accessible talk about investing, why it's important to society, why it underlies economic growth, why it's a really fun and fascinating career. So that was the initial inspiration for GAIN. And it's been very successful that way, reaching about 25 ,000 young women, primarily in the UK. And then as the organization has evolved, and it now has a professional CEO and a staff of 10 people, it's also been focusing a lot on providing pathways for women to actually get into the industry.

1:02:26So it now offers an annual internship program. I think last year, there were about 200 places. And what's been really, really great to see is over half of the interns actually got hired either by the firm that they interned with or another investment firm. So it's been really wonderful to see how it's grown. Have you thought about the challenges through the career? So you're opening up the funnel, so there are more women coming in. As you mentioned, there are even fewer in those senior roles. There are plenty of organizations actually already focusing on that. So here in the UK, there's a group called Level 20 that focuses on supporting and developing women in private equity, for example.

1:03:10There's also 100 Women in Finance, which is a more international, more broad-based organization, and a number of others. Gain is really more focused on The entry point, because I think one issue is because you always start off with a minority, it's less likely that women will influence the sort of culture and policies of their organizations because there's only 25 % of them. And of course, it has its own network that is built up through supporting people and people giving back by going on the internship, getting a job, then participating in our educational events and so on. But at the moment, in the interest of trying to succeed at doing one thing rather than fail at trying to do everything, Gain is really trying to focus on that entry level point.

1:03:54You've worked with lots of investment managers, lots of business managers through your career. I'd love to hear some specific lessons that you've learned along the way. One of them is something we discussed earlier about decision making and the fact that effective decision making doesn't scale into larger groups. So that's something that I've seen happen over time. And one of the wonderful things about being in this type of job for a long time is it takes a long time to see what works and what doesn't work. Actually seeing people have the courage to reduce the number of decision makers and seeing that being successful in a number of cases.

1:04:29I think another interesting thing that I've observed has been as the industry has become increasingly competitive, seeing increasing functional specialization within firms. And a particular example of that is a lot of private equity investing is, by necessity, had to become much more thematic. Because unless you have proactive investment theme and a thesis, it's really, really difficult to actually generate a proprietary idea. But at the same time, because the deal process and deal execution is so overwhelming, time and again, you've seen firms who try to be thematic, try to implement thematic research, but then have that be overwhelmed by the deal process when the deal is coming to a head.

1:05:13And so one really interesting thing that we've seen is a small number of our managers on the liquid side actually forming dedicated research teams that constantly do thematic research all the time and don't get pulled away by the deal process. And that's actually something that we're thinking about a lot because we're a really small team. We also want to be really thematic and proactive about how we begin to shape the portfolio going forwards now that we have it approximately in the shape that we want. But again, it's difficult to do thematic long-term research when you have a 101 difference of day-to-day tasks to perform.

1:05:48So how can you carve that activity out? And we're thinking about, for example, whether we might introduce a reading week. We're part of a university, so let's have a reading week like students have, where we can actually pursue topics that are of interest to the team. I think that would be very rewarding for individual team members as well. Tilly, I'd love to turn to a couple of closing questions. What is your favorite hobby or activity outside of work and family? The hobby that I probably spend most time on is running, but I actually don't really enjoy it. So I'm not sure I'd say it was my favorite, but the way I think about it is if I run, I enjoy the rest of my life.

1:06:27Probably the thing that I most enjoy, but maybe have more constraints on my time is reading fiction. I got into studying English because I loved reading and I still really love it. So I read as much fiction as I possibly can. What is one fact that most people don't know about you? One of them is that as a student, I produced a play at the Edinburgh Fringe Festival. So that was something that was really fun. I'm sorry to say it was really bad. perhaps as a result of that i learned a valuable lesson which was one of my other early career ambitions was to be a theater director and after that experience i realized that probably wasn't going to go so well what's your biggest pet peeve one thing that i find quite frustrating is when people that i know make introductions without checking first i really love meeting people and gain hugely from gathering insights from different conversations.

1:07:28But I'm also, unfortunately, really capacity constrained. And I also try to be very polite. So I just hate it when I seem impolite by not being able to follow up with someone. So it's wonderful if people could just check first before making an introduction. Which two people have had the biggest impact on your professional life? The first would be a gentleman called Peter Englander, who was the the chief investment officer at Apex. And he had a really foundational impact on me because I think he was the one who gave me my first break in investing. I had a number of interviews at Apex, but I could tell that Peter was a real decision maker.

1:08:08And I could also tell that he was incredibly skeptical about me during that interview. Somebody who came from background in English, working in the corporate sector and no investment experience and so on. But he had this unique balance of skepticism and ability to take risk that I learned from hugely. Very sadly, Peter actually passed away earlier this year, but I'd really just like to honor him as a legend within UK private equity investing. The other one would have to be Rob Wallace, who was the CEO of Alta when I joined. And again, he was the person who hired me into my first allocator job.

1:08:46And he's now, of course, the CEO of Stanford Management Company. And I really would say that Rob taught me more than 100 % of what I know about endowment investing. And I'm really fortunate to still be in contact with him today. What's the best advice you've ever received? I think the one that sticks with me the most is something that I learned, again, from a colleague at APAC, so quite some time ago, which was to never make a decision until the last possible moment, because you never know what further information is going to come to light. And that was something that I really struggled with, because I'm an extreme J on the Myers-Briggs type indicator.

1:09:28So what that means for those who don't know is, I love to make a decision, move on, take action, get stuff done. But over time, I have really internalized that. So now I'm probably incredibly frustrating some of my colleagues who are looking to make a decision in execution. I'll say, well, maybe we can just have one more meeting or maybe we can just defer for a couple of weeks, just let the information percolate a bit more. Anyway, hopefully that's for the best. They might disagree. I'll tell you the last one. What life lesson have you learned that you wish you knew a lot earlier in life? One would be that it doesn't really matter if you're not quite sure where you're going.

1:10:06I think I expended a tremendous amount of anxiety early on because I had this early career pivot from academia into something else. I didn't have a particular career goal. There didn't seem to be a clear path. But looking back, actually, all of those different experiences in consulting and business and direct investing and so on have been really foundational. But at the time, it all seemed a bit random. That's one thing I would definitely say to people earlier in their careers is just don't worry if you're not sure where your experience is going. Just get what you can from the experience because it's going to come back to benefit you one day.

1:10:46Tilly, thanks so much for sharing your keen insights across your career. And although I understand you're really happy now. We will all watch carefully should in the future you ever decide to make another career move. Well, hopefully I won't have to, but let's see. But thank you so much, Ted. It's been an absolute pleasure. I really enjoyed our conversation. Thanks for listening to the show. To learn more, hop on our website at capitalallocators.com, where you can join our mailing list, access past shows, learn about our gatherings, and sign up for premium content, including podcast transcripts, my investment portfolio, and a lot more.

1:11:25Have a good one and see you next time.