Training Grounds – Carnegie Corporation of New York (EP.377)

26:17Alyssa, I'd love to start with you. So you're coming into this. How did you learn about manager selection from this team? Really through apprenticeship. I mean, in the beginning, went with Ellen, Meredith, or Kim to kind of everything. A few instances, actually my first day on the job at Carnegie was at a manager meeting in Atlanta. So I showed up, I took the MARTA to the meeting. I didn't know one person. I walk in, it's like all these ENF people and the GP. I didn't really know what I was supposed to do. But really watching the way that initially Ellen and Kim and then Meredith, when she came back, engaged with managers and everything Ellen just described.

26:57Like we had lots of dinners and just spent a lot of time trying to get to know the managers as people. All the things about their strategy obviously had to make sense, but we would write these extensive investment committee memos. And my first couple of months at Carnegie, Ellen basically gave me a huge stack of memos. She said, get to know the portfolio. This is how you need to learn the portfolio. And so I read them all. And the section on team was as much a part of the memo as the track record, case studies on actual investments and general strategy thesis and risk. Like the team section was a huge chunk.

27:38And that was really my introduction to manager selection and realizing that at the end of the day, it's so much a people business. And it is so much about, as Ellen said, their passions, their judgment, who they are as people. I learned from watching. Kim, what was different coming to Carnegie about Carnegie's process from what you'd experienced before? Literally everything was different. The point that Elisa just made about the length of our memos, you just can't overstate that. And at the time it feels like, oh my God, we have to write this long memo. But this is how you really figured out if you understood the risk of what was going on.

28:13And I think that people lose sight of the fact that there's value in documenting what your thought process were. And I think that we spent a lot of time really thinking about how a manager would treat you when things went wrong because the documents don't protect you. Ellen talked a lot about that. We have to know that they'll make the right decision when something goes wrong. Every single person on the team read every memo. And edited it. And edited every memo. Mailing day was a team sport. And we would do a checklist and you'd have to check off that you read that memo and whatever changes you made.

28:50And everybody had different strengths. Some people were really good at proofing. Some people were like, okay, this doesn't make sense to me. You need to draw that out. And having all those voices in the room, really thinking about a manager from their own perspective, because we all came from different places. So now here we are with our background saying, I read this memo. I don't get this, or I do get this. Memos, letters, everything, all paper. And it would come in and you were the first person who did it. Then you would put everyone's initials on it. You'd read it. You'd make your marks. You'd put stuff in the margins and correct stuff.

29:22And then you would cross your initials off and you would take it to the next person and then they would do it. And so you could see everyone's comments. And so it was like a manual versioning. We were all apprenticing every meeting because I would look at somebody else's comments and I was like, oh, I didn't even think about that. But that's a good point. You were constantly learning about the total portfolio. And I think that was just powerful. And so you get into this process where you really do feel a responsibility to your team and you feel a responsibility to the portfolio and you're just constantly learning.

29:54So it just that was what was so different. When everyone's reading all these memos, everyone's making comments and learning. How do you actually make a decision? The asset class head ultimately could take or not take it with Ellen. So Ellen overarching had responsibility for the full portfolio. If the person who did hedge fund, Lee Tan, had a comment on your thing and you didn't agree with it and Ellen didn't agree with it. Simple. If Ellen agreed with what Lee said, it made you think, should I be paying attention to this? And sometimes you could still argue. I felt like there was a lot of freedom to argue and disagree and come to conclusions.

30:31And I think that Ellen gave us a lot of rope to hang ourselves. It was your portfolio. She had a lot of opinions and we respected and trusted her. So we weren't going to ignore those. But ultimately, we got to build a portfolio that we thought was a good portfolio. And I think that was powerful for me and absolutely something I took into managing teams later. To the earlier point of because the portfolio was mature and you weren't adding as much new stuff to it over time, there were things that one member of the team really loved and others had questions. And we would bring all those questions up and we'd talk about it.

31:02I think that was probably the point where you and the organization felt the strain of, OK, how do we systematize some of this stuff? because there was this, are they pounding the table on this? Okay, if they're pounding the table, then we're gonna go with them because they're our peer and we trust them. So Ellen, ultimately the buck is gonna stop with you as the CIO. How do you balance wanting to impart your experience and judgment on a manager selection decision compared to allowing the team to have rope and have their impact on the portfolio that ultimately you're responsible for? I think that is the key question for every CIO because at least my philosophy is that I'm ultimately responsible for what's in the portfolio.

31:42The buck stops with me. But you've got great people. You want to empower them. You want to let them run and let them know that they have a lot of autonomy and authority. So I guess the way I handled it was if somebody came to me and said, I really like this manager, I would try to meet with them early so that you don't go do a lot of work for no good purpose, so that there are no surprises. I think by the time something got to a memo stage, there were very few things that didn't get through at that point because we all knew the portfolio. We all knew that manager and the rationale for putting it in the portfolio.

32:24But yeah, it's a real tension and I don't think it ever quite goes away. Alisa, there are all these manager meetings happening. The team is growing. You get to a point where you can't have everybody in every meeting. How did you see that evolve? Like when you were included, when there was a meeting, maybe you wanted to be in, but you weren't included? It changed actually after Ellen left and Kim and Meredith became the co-CIOs, which was just such a wonderful chapter. They created a matrix strategy where you were primary and secondary on a strategy because the portfolio was mature. It was fairly large.

32:59And the team, while not huge, wasn't tiny either. And you couldn't really bring seven people to a meeting, especially if you were traveling. So the way that Kim and Meredith set it up was everybody had primary on their asset classes and then you were secondary on certain asset classes. So you always had both the option and were highly encouraged to attend a meeting where you were the secondary. And part of your job also was to play devil's advocate for that. The reality was over time for things that you were not the secondary or the primary, it became harder to go to all those meetings and you just didn't most of the time.

33:34We did still have weekly team meetings where we would have tear sheets and everybody would talk and everybody was encouraged to play the devil's advocate role. But over time, as the portfolio became more mature, you did more or less spend physical time with the managers for which you were the primary or the secondary. Alongside this primary, secondary, how did you think about what roles everyone on the team would play in a meeting with a manager? I never really thought about that. We weren't choreographed. Maybe if there was something going on with a particular manager beforehand, you might say, hey, I want to make sure we ask about this or that.

34:08But other than that, there were some instances where it became choreographed. So with Kim and Meredith, every other year, we would take a big team trip to a geography to learn about the region and the whole team would go. And it was intense. The days were like from seven in morning till 11 at night, just back, back, back, back, back with economic leaders and government leaders and managers. And we would rotate who was the note taker in every meeting. So it became very flat. The CIO could be the note taker or the most junior analyst could be the note taker. But it was so that the younger people on the team had the opportunity to listen in the meetings and not just be transcribing.

34:44And it was every asset class because we wanted people who, if you were a real person, but we're going to see a venture manager. How would you rate this from your perspective? We did those every three years. It was great culturally. It was probably one of the most important cultural elements of the team, but also we grew as investors because we weren't going to those trips to make investments. We were going on those trips to decide what conditions needed to exist for us to make investments. So if we go from the manager selection side to thinking about the portfolios. How did you discuss those incremental changes over time as a team?

35:23I think you know that when you have a living and breathing portfolio, it changes very little on the margin. And when we made asset allocation changes, they were typically increments of two and a half percent one way or another. In some ways, asset allocation is over glamorized. If you're an investor with a long time horizon, you're going to have a portfolio that's dominated by equities one way or another. And it can be public equity, it can be private equity, it can be hedge funds. You're going to have a little fixed income for your safety and anchor to winwards. I think this is heresy to a lot of people, but I just think it's not that complicated.

36:04And you're picking managers that are going to make great risk-adjusted returns. you don't worry about volatility of any single manager because when you put them all together, guess what? The volatility is pretty low. A lot of it has to do with what we can execute well. And so we had great real estate expertise. You did have the team sit around a table once and you said, I want each of you to think about if you had a blank sheet of paper, how would you design the asset allocation? And we all went to our respective corners and thought about it for like a day. And we came back and essentially we all had modifications to our asset allocation.

36:42But by and large, if you broke out equity and diversifiers, we were pretty much in line. We made tweaks on the margins, but it was a very good exercise. A CIO can't manage another CIO's portfolio because you really do gravitate to your strengths. If someone looked at Ellen's portfolio, it had way more real estate than other people's portfolios had because she had comfort and a tremendous amount of skill in that asset class. So we had a lot of it. But when Meredith and I became the CIOs, we probably had more privates because that was our area of expertise. So asset allocation gravitates to what creates good manager selection.

37:25It will definitely tilt to whatever the CIO feels most comfortable with. A lot of managers could fit into three different asset classes. And a lot of institutions don't invest with managers unless they fit into a nice, neat bucket. And we didn't have to worry about that. We would always find a place in the portfolio for a talented manager. And that goes back to the identifying talent. We were focused first, back to the earlier comments, on the people and the talent and the teams versus checking boxes on length of track record and exposures. Ellen invested with one manager who I think he had$5 million and he was operating out of his bedroom.

38:05Texas value, small cap value. And turned out to be maybe one of the best investments in the history of Carnegie. I want to say something about our governance because we had a very supportive investment committee. And the committee at the time, and maybe they still do, They had to approve every investment recommendation, which is not today a best practice. But what I liked about that is that I think it helped us take more risk. Why are you going into Brazil in 2005 when everybody hates Brazil, but it's super cheap? They understood our thought process, our rationale. They bought into it. And then three years later, they're not going to say, why did you make this stupid investment?

38:48So we did things that were early, things that were out of favor, and we were able to do them in reasonable size so that they did move the portfolio. And the committee knew what we were doing and why. And that is a benefit of having the committee approve. There are some disadvantages as well, but I think it worked well for us. 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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40:40as they stayed with you? That's always the challenge. You and I believe so much in promoting people on the team and helping people develop and grow and giving them more responsibility. I have to say it's a struggle with a small team. We started out without any hierarchy or ways of promoting people. So I did really have to go to bat every time. I wanted to promote people and also increase their compensation commensurate with their experience because that doesn't really happen in a foundation so smoothly. And we were still the new kids on the block and still proving ourselves, I think, in the early days.

41:26But it was very explicit effort on my part. And then I think when Meredith and Kim took over the portfolio, you still had to keep it very top of mind. It's so critical. In some ways, it was part of that, but also it was an opportunity outside of that to give people new experience and help them develop skills. I always felt you were extremely encouraging. Go sit on panels, go to this conference and be involved on the advisory committee. Raise your profile in the larger industry and very supportive as well of raising our profiles in the larger industry, which there's an element that is also career development.

42:02Lisa, you had the full path here from coming in with no knowledge as an analyst to today as CIO. How did you see your trajectory within Carnegie? Initially at Carnegie, once I dove in, I viewed my path very much as linear. And when Ellen left, I lobbied for myself for a promotion because suddenly my responsibility got a lot bigger because the team was smaller. we later added people, but we were at this very lean moment. And I kept marching up that ladder. And I remember at one point, I went to Kim and Meredith and I said, I'd like to be made at some point deputy CIO. They were very thoughtful, but they were like, there's two of us.

42:42And shortly thereafter, we brought on some additional peers at my level. And then there was just no way that could happen. As my tenure increased at the foundation and the portfolio became totally mature, there wasn't that much that we could do from an investing perspective. And so I started to have questions of like, do I even want to stay in this? And I remember being very antsy. By that point, Meredith had left to go join Trinity and Kim was the sole CIO. And Kim and I have always had a very open, honest, amazing relationship and friendship and mentorship. And I would just go talk to her and I'd be like, what should I do with my life?

43:20Do I want to be a CIO. And I will say one thing that Kim did that was always extraordinary was, and this is, I think, an extension of Ellen and Meredith's leadership encouraging everybody to be public in the industry. Kim encouraged our team to take every call from a headhunter. She said, you should know what you're worth and you should know what else is out there and you should every day be making a choice to stay here. So she didn't want people on the team who were de facto staying. She wanted to be a conscious decision of I am choosing to stay here. So I took a number of calls. I did a number of CIO interviews.

43:56I think there were three that I was the first runner up and didn't get. And over time, it got demoralizing. And so when an opportunity came to me in deep COVID to join something totally left field, a biotech life sciences firm, I went to Kim and I was like, is this crazy? And she, to her great credit, said, you've been itchy for several years. You've been a little bored. If you do this and it's amazing, wonderful, then you'll have this amazing new career. And I called Ellen too. And Ellen said, actually, I called everybody at the table. Ellen said, Elisa, the world is so much bigger than just ENF.

44:35And she talked with me about how she was seeing or she had seen in this next chapter of her life and career, everything that's out there. She said, this will open your mind in a whole new way. And Kim said to me, if it's not amazing, you'll come back. You now will have a more well-rounded background. Nobody can say you're just a real assets person because now you have been an early stage venture and life sciences. And you have a job with me wherever I go. And she was not yet at Columbia. And it was such a gift to me because I felt that I suddenly had a parachute on my back and I could take this crazy jump.

45:13And it's just such a testament to all three of them of the way that they really develop and encourage the people that work for them to go explore the world with no judgment. I think there's a lot of bosses that you could not say. So I had Entra called me about this call. Kim even helped me prep like a couple of times. So it was not linear. I went this other direction. I learned a ton. And then I actually went to Kim in January of 22. And I said, please put me in your budget for January of 23. I want to come to Columbia. And she said, I'm already holding a place for you, but I need to tell you, I think you're playing small.

45:50And I said, that's really generous of you, but I love working with you. And I'd be delighted to be in that role. And then shortly thereafter, this happened. So this is kind of the troubling part of the conversation, because it turns out that none of you are still at Carnegie today. So this incredible training round, this great camaraderie you all have, but then naturally one by one, at least it told her story, you're not there. So Ellen, I want to ask you, after a dozen years, you left. What was the thought process at the time? So I was at Yale for 12 years and seven months, and I was at Carnegie for 12 years and seven months.

46:28With Carnegie, we got the portfolio through the financial crisis really well. And I had a great team to succeed me. That is the greatest thing that any CIO can do is to have bench strength for people that can take over seamlessly. So I just felt that the time was right. And I was ready to try something different. And I didn't know at the time what it was. But I thought, you know what? I'm not going to commute for a year. I'm going to tend my garden and walk my dogs and play tennis and figure out what my next chapter is, knowing that Carnegie was just in a great place. And it did work out very well.

47:09So Kim, Meredith, you then become the co-CIOs. I'd love to hear when you started discussing what your leadership regime would be like. What did you decidedly want to keep that Ellen had put in place? And what did you want to change? So there's a bit of complexity around it because it was Kim and I, right? The way that all happened was they came to us and said, we want it to be both of you, but you figure it out. Come back to us and tell us what that looks like. So rather than saying, okay, what do we want to do different than Ellen? We were more focused on what do we want to do here that makes sense with the two of us from all sorts of perspectives.

47:50And we both wanted to be a CIO. We had both thrown our hats in the ring to be a CIO. We very deliberately talked about, okay, how do we get enough experience if this doesn't work out? We could go be CIO somewhere else and justifiably say, I had a real role in being a CIO at a portfolio. One of the things I remember it is we both thought we wanted to be CIOs, but we also, when we were structuring it, we thought just in case we had to go back and be managing directors, we needed to still have our foot in the manager selection space. And so we thought about that too. And I think one thing that Ellen didn't do for us that I try really hard to do now is to show people exactly what we did.

48:32Because I remember a lot of times we'd be like, what is Ellen doing? We're doing all this stuff. Where is she? What is she doing, right? I will say, though, I had a breakfast with Ellen on the verge of her leaving. I was like, I want to be a CIO. I want to be a CIO. I want to be a CIO. And she was like, Meredith, there's a lot of not investing that goes into being a CIO. And I still, to this day, remember, God, truer words. I think we did a really good job of constructing something that allowed us to work together and have partnership. It would not have worked, I think, if we didn't come to it as such good friends.

49:11And I trusted Meredith so much. I had complete faith that she wasn't trying to do anything wrong. I hope she had that same faith in me. We could manage together because we had this experience with Ellen beforehand where we had built trust. We had built a lot of trust. We knew exactly each other's investment philosophy. We had a very shared investment philosophy. It was very much grounded in the way that Ellen thought about things. And so it wasn't two different people who weren't trained the same. We were trained the same and we had a lot of shared philosophy, but we did get just tossed out there and was like, figure this out.

49:48The team was different. Lisa was relatively senior and we ended up hiring two other people who were relatively senior. So then it just by virtue of that, it had to be different than how Ellen ran it in terms of managing the team and the processes and who was going to be responsible for what. In the same way, we were trying to get experience across the portfolio and build that into how it was organized, how could we offer the rest of the team experiences across the portfolio? Elisa, as you were watching both of these different leaderships, what changed for you in how you went about your work? In the same way that we had primary and secondary at the team, actually, Kim and Meredith had primary and secondary.

50:26So they divided the portfolio between them. I ended up working more with Meredith, but I just had a lot more autonomy and independence because I had more years of experience. So I was making many more decisions independently that I would then share with the team. The portfolio had also matured. The two other managing directors at the time, Ken Lee and Brooke Jones, would probably say the same thing. Over our portfolios, we had a lot of autonomy and influence over the portfolios for which we were responsible. And we had junior people on the team that we were now working with. They were supporting us.

51:06And that was new for me because under Ellen's leadership, I didn't have that. So that was a change. I think that what's important to note is that, as always happens when a CIO leaves, two people left. So we had a fairly senior analyst that left and a director that left when Ellen left. And so it was just essentially the three of us. So the next leadership change, Meredith leaves to go to Trinity. Now, different situation, different pool of capital, but now it's just you, no compromises. What did you do the same? What did you do differently? I would say it's been a combination of both, actually.

51:44It definitely was going back to like working for a startup. Our first hire came on in June of 2016. Portfolio was invested. So we spent a ton of time meeting the managers and thinking about, okay, where are we right now. But because the real estate at Trinity is so significant, I was also spending a significant amount of time on that. So I was between in the details. I've got to be right next to the people that I'm hiring, doing a lot of this stuff. And a decent amount of my time is taken up with this real estate stuff. So it's got to be more that I let people run with the stuff that they're doing.

52:16I can't be at every meeting and I can't be really pushing this manager or that manager. Kim, so you finally got rid of this co-CIO. Oh my God. Still within Carnegie, anything that you changed? First of all, Meredith came to my office and told me that she was leaving and I cried. I cried too. And I was like, you don't cry at work, but I cried at work. And I was just like, you're right. So it was a hard decision, but it was very different. Every single person who was on that team, we had been involved in the hiring. So we chose every single person that worked at Carnegie. It wasn't like I had to get to know this team.

52:53I had hired this team. We already had a system in place. We were concerned about the co-CIO structure, not because we were concerned about each other, but we knew it put a ceiling on the rest of the team. That when Elisa came and expressed interest in being deputy CIO, we knew that wasn't possible. It's not possible to have co-CIOs and a deputy CIO. It just made it really challenging for anybody else on the team to grow. And so the blessing of Meredith finding this new passion, something that she felt really strongly about going to do was that it gave a lot of oxygen to the rest of the team to grow in responsibilities.

53:31Because now I couldn't be at all the meetings that Meredith used to go to. People thought we shared a job. We didn't share a job. We had two. Full jobs. Full jobs. So I was not going to now do my job and Meredith's job. I think the other thing that was a blessing, this point that Ellen taught us that we should be out there and be public. We were small but mighty at Carnegie. We punched above our weight because we were thought of, I think, as thought leaders. We were like, we're not going to be able to influence managers by our size. It has to be because they think we're smart. So how do you show people you're smart?

54:05You serve on panels. You ask good questions in meetings. You become engaged and offer advice to managers. And so I knew that this was going on and I couldn't do all of that. So that made everybody else have the responsibilities. When Meredith and I were co's, we got to join many more boards than we would have if we had just been alone. We got to serve on a lot more panels than we would have if we were just alone. And that sort of elevated Carnegie. It was for the benefit both of us and of the institution. And we really, I think, grew in stature. People really thought of us as people who were engaged.

54:41And so when Meredith left, it was just like, OK, so who's taking what piece? Who's getting more responsibility? What does each of the people want to do? I think it was just the oxygen the team needed to grow and offer themselves a little bit more ability to think about what the CIO job is. Once Meredith left, it was like everybody got to see what the CIO job was. We really open kimono'd everything about the job, giving them space to decide if it was really something they wanted to do. So, Elisa, before you left, this is now the third iteration of a CIO while you're on the team. Any changes that you saw other than there's more of the same that you're able to do now?

55:20Biggest change was probably just in my own evolution. I'd been doing the job a long time. I had a very close relationship with Kim. So my role changed. We talked about a lot of things that I wasn't privy to when Kim and Meredith had each other and when Ellen was there. So I learned a lot about what Kim was going through. And I was a sounding board. She would come into my office. I got exposure to personnel issues and larger foundation issues. So that changed because the portfolio was so mature and Carnegie's no incoming cash flows. So once you have a mature private portfolio, it just is what it is.

55:55There's not a lot you can do without new cash flows. We became much more innovative. And Kim came up with a number of initiatives that gave us, the senior investment team, more room to run. So I started leading our emerging manager and diverse manager initiative, which was across asset classes and was a major new undertaking for us. And I would say pushed the institution out really ahead in that effort. And so we started doing these more creative things. So creative. Lisa came up with so many really interesting ways to bring in more diverse managers and bring the community into Carnegie. She had also been on the team that did the renovation of the Carnegie space, which was super interesting.

56:40But once it was rebuilt, we could do all sorts of activities at Carnegie. And she spearheaded so many of those things. We hosted speed dating for managers and we invited many of our peer institutions and a whole subset of managers to come to give them exposure. So we just started to become more creative. Kim gave us the freedom to do that and the institution supported us. You had this team that was now more sophisticated and older, and we were not in a crisis. We were in zero interest rate environment. Privates were raging. So things were fairly stable at the portfolio level. So we became creative about ways that we could add value and push the boundaries.

57:21Kim, you hit your 12-year and seven-month or so mark. So 13 years and five months at Ford Foundation and 13 years and seven months at Carnegie. So this is one more year. It takes me longer to figure it out. It takes Ellen to figure it out. What was the impetus for you moving to Columbia? When they first came to me with the Columbia job, I said I wasn't interested. I loved Carnegie. No place is perfect, but I felt supported. I felt like my opinion mattered in the senior leadership space. I really felt like Vartan was a mentor and coach to me and a father figure to all of us in real meaningful ways.

58:03And so I wasn't necessarily looking to leave, although I knew that one of the big problems with CIOs is they stay too long. And I do think portfolios need refresh. And I knew that I had a team of such quality talent that if I didn't leave, they were going to leave at some point. And so I was just like not interested. And then the headhunter was like, you should at least talk to them. I just I can't believe you would not take this interview. If you're not going to take this, what are you going to take? That's literally what he said. And I was like, all right, I'll do the interview. And so in the middle of the interview process, COVID happened.

58:37And I didn't realize what was going on with the rest of the team. The only person that I knew was looking was Alisa because she had shared with me what was going on with her. But I didn't realize that everybody else, because you could interview just like I did over Zoom and not have to go anyplace. It got to the end and I still wasn't 100 % sure I wanted a job, but the competitive instinct kicked in, as everybody knows. I remember working on your presentation with you. You were like, this better be the best presentation Columbia's ever seen. I don't even know if I want the job. They have to walk away thinking mine is the best.

59:11They gave me the job. And obviously I said, yes, I got the team together on a Zoom call to announce and the faces were like, it was shock. And then both Ken and Brooke said, I need to get on your calendar. I announced on Monday. I spoke to both of them Tuesday and Wednesday and they announced that they were leaving as well. So then I couldn't leave when I thought I was going to leave. I thought that I was going to take some time and spend some time with my girls and stuff. So I stayed till October 30th and I started November 2nd at Columbia because I felt like Carnegie had done this amazing thing for me.

59:46I couldn't leave them to lurk. Elisa stayed. She was supposed to leave earlier, but agreed to stay. So everybody jumped in and was like, okay, since those two were leaving, this group rallied and stayed and pushed it over the finish lines just to make sure that this place that we love, this institution that had done so much for all of us, we didn't want to leave it without proper stewardship for a while. It was a tough decision, but it was the right decision. The interesting thing about Columbia, which is not an experience I'd had before, was I was inheriting a team. And that was very new to go into a situation where you really are not involved in the hiring of a single person on a team.

1:00:24And I think that was the biggest growth moment for me, because even though Columbia is much bigger and they manage the portfolio in a very different way, the portfolio management wasn't the intimidating thing. it was the fact that I went from having a team of nine people, including the ops team, to 30. And lots of complexity around that because the non-investment team was bigger than the investment team, which was not the case at Carnegie. It was a new muscle to build. And so it's been interesting to do that too. Were there things you learned from your experience at Carnegie that helped you exercise that muscle at Columbia?

1:01:03I think the thing that I started with, and I think was partially because we were in a pandemic was just being on a listening tour. Everything about it was so different. I look back on this now and think, I can't believe I took this job without information, but they wouldn't give me any of the portfolio before I joined. They said they had signed NDAs with their managers and so they couldn't disclose anything. So I had big picture portfolio information, but not a single manager name. So I walked into a portfolio November 2nd that I had seen for the first time on November 2nd. And there were two managers that overlapped.

1:01:36That's it. Columbia had such a different philosophy on how they managed assets that it literally, there was nothing that was similar. I didn't know these names and it was in COVID. So I couldn't know these names. I knew that it was a priority to keep the team intact, but I also knew that the way they were structured and how they did things was not a way that I could keep. Ellen managed us. She gave us a lot of authority and a lot of ability to express our own opinions and disagree. They disagreed a lot and they had a lot of really strong opinions, but they didn't take responsibility for the ultimate decision because that wasn't the role that was set up for them.

1:02:15So now I was asking them to be a very different organization than they had been before. I think the biggest thing was trying to change a culture because I wanted to get back to a culture that was much closer to what we had at Carnegie because I loved it and it was not what was there. So Lisa, you're now circling back to spend some time at a manager. How did you take what you knew both from your experience at Carnegie and then what you saw on the outside and use those lessons to impart your judgment in the CIO seat for the first time? This is such a wildly different environment than a foundation or an endowment that there are some learnings that are directly transferable, some that are adjacent and some that are like totally irrelevant.

1:02:59In this role, I'm the chief investment officer for Michael Dell's family office, as well as his foundation. He is alive. He's brilliant. He's around. He's engaged. Unlike Vartan, he really likes investing and is very curious. So when I started, I came in and I did a presentation at the end of my first week of what my initial plan was. And part of it was to do a listening tour, to go meet with as many CIOs as I could, particularly those that had large single stock positions in their portfolio, which was like Hewlett, Gordon and Betty Moore in the beginning had Intel. So I tried to find as many of those as I could.

1:03:36And then I went and talked to all the CIOs that I knew and trusted, these three women being very high on that list. And everybody gave me advice of, you got to get your investment policy statement. And so I collected a bunch of investment policy statements. I tried really hard and I was trying to craft it. And at some point, like a light bulb went off in my head. And we do of an investment policy statement, both for the family office and the foundation. But when it's one person whose capital it is, you can have a statement and it can have parameters, but it's a fluid exercise. And this is a living, breathing person who has opinions and is in the markets every day and also watching his Bloomberg screens.

1:04:16And so our IPS is about as broad and general as it could be. And it's basically don't lose money. So there were things that just don't transfer from an institution. And then there are other things that I have really tried to do. So in contrast to Carnegie, I had to build a team. And I decided in the beginning, I wanted a team of generalists because I wanted people to be making relative value decisions all the time. What I'm seeing naturally over time is people do gravitate towards their specialties, and it just happens. And it's funny because when I started, I don't have a formal investment committee.

1:04:53It's not quarterly. It's whenever we have something, put something together. When I started, I was like, we're going to keep it lean and mean. I don't want to be bogged down in bureaucracy. Now we are processing memos between, they're probably eight to 12 pages. And I'm now having everybody on the team read them. And I'm adopting all these things that I learned from working at Carnegie because I realized they were best practices and they are applicable and we should be doing them if we're going to be doing the type of really deep and thorough work that we all did together. But it is really trying to thread the needle of what is the best that I can take from what we all had at Carnegie and then adapt it to this totally different environment that has major cash inflows all the time.

1:05:37We have none of the same problems. We have totally opposite at problems. It's reminiscent of Ellen showing up at Carnegie and being like, I have days where I'm like, oh my God, I don't even know how to think about this. So it's really been an exercise of calling every smart person I know and saying, how would you think about this? What do I think about what they said? And then synthesizing all that. The thing about family offices is, and this is like an adage in the family office world, you've seen one family office, you've seen one family office. They're all different. And so there are not things that I can directly overlay from an endowment or a foundation or a family because we have our own unique set of issues related to our pools of capital.

1:06:18So it makes it super exciting. And all I can do is just grab every nugget of wisdom and best practices that I can apply from the mentors that I have and then figure out as I go on the other stuff. Ellen, if we look back at this history, so there's these three, Kim, Meredith, Elisa. The other names we mentioned, Lee, Niles, Brooke, Ken, John Michael, all CIOs. You're talking about teams that were seven investment people, and almost every single one today is a CIO. Do you think that Carnegie as an organization was fostering this? Or was this something that started because of you and the individual people that are there in that now John Michael's taking over and there isn't a team below him at Carnegie?

1:07:05I have been blessed to be mentored by incredible people who have supported me and helped me in my career, whether it was in college athletics or my investment career. And I do really work hard at investing and working closely with the people that work with me. And I think that the greatest thing that you can do is help people be their best selves and bring out the best in people. But I wouldn't say that it was explicit. I think when you're either lucky enough or smart enough or both to hire great people, they're going to flourish. So I think it's a combination of probably some luck and some deliberate effort on my part.

1:07:53And then I would say at the corporation, we all had this great sense of mission. I think people that work in the endowment and foundation space have a really strong set of shared values. We care a lot about these institutions. And so it's very natural if you're a talented person that you would want to lead the investment efforts for another institution to help them achieve their mission. So I think that's a thread that binds us. And then you have great people and they're the cream. They rise to the top. I'd love to do one final round on your biggest takeaway from the experience at Carnegie. I'd say my biggest takeaway and it's an appreciation was, you heard it a lot, being given the rope and just the trust of that was really motivating.

1:08:48And so it's something I try to apply to how I manage people as well, just to sort of do this work and come back to me, but run with this. And actually, Kim, you've articulated when you started working for Betty Fagan and she said, there's nothing you're going to do that we can't fix. So take risks, go out there, just start going. And Ellen did that for me. And I think Vartan did that for us. And so that I'm hugely appreciative of. I think it's not accidental that there are all these CIOs for exactly that reason. I think the hardest thing about becoming a CIO is that it can be lonely and you can be paralyzed by the fear of getting it wrong.

1:09:28But we got to practice that for years of someone encouraging you to take risks. Ellen is a phenomenal mentor. She went to bat for us. She argued for us. She put our needs ahead of her own often. We learned that's how you lead. I don't think it's accidental. I think we created cultures where we gave people permission to make decisions and we gave them permission to not always be successful. You don't have to get it all right. You just have to mostly get it right. And anything you get wrong, we can fix. If you make investments in the right size so that it doesn't overwhelm your portfolio, you can undo them.

1:10:08We learned that. And I think that was a lesson that Ellen taught us. Like I said, she made investments in things that I think people stopped and were like, I can't believe you guys are investing in this. But they were small enough. And then as conviction grew, we gave them more capital and more capital. And I think that's how you learn to take risk. And I think we were taught how to take risk. I echo everything that was said and really to be contrarian. We were encouraged to do that, which is scary. But it was encouraged and embraced. And that has stuck with me. And then the other thing is not just encourage taking chances in the portfolio, but taking chances on people in the way that really Ellen took a chance on me.

1:10:52So as I look at the team now that I'm assembling, there are some unexpected backgrounds. And it's really part of my takeaway from the teaching of Ellen's legacy of you can get incredible people from all corners of the world and so have a broader view of what's out there rather than just somebody who's come up in the ENF ranks. Ellen, any final words? They've all said what I deeply feel and appreciate. But I want to pivot to another thought about what I appreciate about Carnegie, which I did not fully appreciate until I left. And I, through both my work at Edge Hill Endowment Partners, where we managed endowments for institutions with much smaller asset bases and serving on investment committee, I learned to appreciate the governance at Carnegie.

1:11:44And if you have captive capital and you have good governance, it is nirvana. And governance issues are so important. And so many institutions have dysfunctional, quirky governance that does not serve them well. Our investment committee was far from perfect, but they had our back. They're thoughtful people. They came to every meeting prepared. You cannot ask for more than that. And they empowered us to take risks. They backed us when we were doing some pretty out of favor things. And we had long tenures. I could go on and on and on. But Carnegie was just a fantastic place to work. And I didn't fully appreciate it until I was in some other situations.

1:12:36Alan, Meredith, Kim, Elisa, thank you so much for sharing this incredible story of your time at Carnegie. Thank you. Thanks, Chad. 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. Have a good one, and see you next time.

1:13:15Thank you.