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Institutional investors continually seek top-tier managers, relying on insights, industry signals, and rigorous due diligence led by expert portfolio teams before committing any capital. While these preliminary drivers are widely adopted and can often contribute 100 to 300 basis points above relevant benchmarks, the pursuit of above-average alpha remains relentless. Could convex alternative investments help add alpha to a university, library, hospital, pension, or endowment system?
The Improving Alpha podcast is pleased to welcome Dave Morehead, CIO, Baylor University. In this episode, Michael Oliver Weinberg chats with Dave about his journey in the world of marketable investments, while sharing allocator insights that have defined his 15-year tenure managing Baylor University’s endowment.
Key takeaways from Dave’s discussion include:
- What was the evolution of Baylor’s endowment, now valued at $2.3Bn, coming out of the global financial crisis and the steps needed to stabilize its future?
- Why is there less focus on a hard percentage return target for Baylor and more emphasis placed on strategic internal goals?
- Tweaking the traditional diversification strategies that many endowments use today in order to diversify the means by which alpha is created.
- How data center and marina investments play a role in Baylor’s convexity investment approach.
- Baylor’s triangulation approach in combining the quantitative with qualitative manager checks and character assessments in order to more effectively avoid red flags in investing.
- Why the institutional investment market can kneecap you when you make assumptions on manager purity and humility prior to an allocation decision.
- Lessons learned about portfolio risk, organizational structure, and mentoring the next generation of investment professionals.
- And more.
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