Navigating Risks in Investment Management with a Limited Number of Managers

Paul Chai’s journey from first-generation immigrant to Chief Investment Officer of a $1 billion endowment is anything but conventional. In this episode, we unpack how he transitioned from aerospace engineering to managing capital, his approach to investing in “outsiders,” and the delicate balance of taking risk in hedge funds, GP stakes, and tactical trades like TALF 2.0. Paul shares how Kansas State University's endowment supports the school’s mission, why they invest in lower middle market buyouts and small hedge funds, and how they find and evaluate emerging managers.

Highlights: How being a first-generation immigrant shaped Paul’s investment philosophy

Why Kansas State backs outsiders—and what they look for in emerging managers

The TALF 2.0 trade that returned 8% in 6 months—4x the bond index

How small hedge funds and lower middle market buyouts can deliver outsized alpha

Kansas State’s 3-bucket portfolio structure: growth, diversifiers, and liquidity

Why investing in people is Kansas State’s highest-ROI strategy

Guest Bio: Paul Chai is the Chief Investment Officer of the Kansas State University Foundation, where he manages the school’s $1 billion endowment. A former aerospace engineer and consultant, Paul was recruited into investing by his college roommate and spent 12 years at a family office before joining Kansas State. He leads the investment team’s efforts across public and private equity, hedge funds, tactical strategies, and more — all while supporting the university’s mission of accessible, affordable education. Paul is a first-generation immigrant and an MIT graduate.

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Sponsor: Republic is the leading global investment platform making premier private market opportunities accessible to all investors. With over $3 billion deployed across its network of investment platforms, funds, and affiliated firms, Republic opens the door to new asset classes typically reserved for institutional investors such as—private equity, venture capital, and even sports teams and your favorite film producers.

All securities, including the Hamilton Lane’s Private Infrastructure Fund, are offered through affiliate Republic Broker-Dealer, OpenDeal Broker LLC Member FINRA & SiPC. All securities come with specific risks not limited to a total loss of your investment. Past performance is not indicative of future results. Please review the risks specific to this investment on the HLPIF deal page hosted on http://republic.com/hlpif.

Sponsor: At Carta, we’re on a mission to connect the participants in private capital — from investors and LPs to their portfolio companies — through a suite of financial intelligence and reporting software that’s purpose-built for venture capital and private equity. Since 2018, we’ve been empowering GPs, CFOs, and CEOs to escape obsolete systems of disconnected FP&A tools — all in favor of a single, unified software suite that helps them make impactful strategic decisions and deliver outstanding results for their investors. Learn more at: www.carta.com/fundtax

Sponsor: Alpha on the Delta is a captivating, invitation-only alternative investment conference held during New Orleans' legendary JazzFest. Now in its third year, it brings together 150 institutional LPs, 30 leading GPs, and visionary entrepreneurs for a dynamic experience of knowledge sharing, relationship building, and cultural celebration.

The carefully curated agenda features engaging panel discussions with industry leaders, facilitated 1:1 meetings, and exciting social events showcasing the vibrant spirit of New Orleans. Attendees also enjoy access to Weekend 2 of JazzFest, offering an unforgettable blend of world-class music, cuisine, and connections. With limited attendance, Alpha on the Delta fosters meaningful relationships and transformative insights in an unparalleled setting.

Join us for a packed agenda spanning the Alternative Investment industry, music, and world-class cuisine. Visit http://HowIInvestDelta.com.

Stay Connected:

LinkedIn: David Weisburd: https://www.linkedin.com/in/dweisburd Paul Chai: https://www.linkedin.com/in/ppchai/

Links Kansas State University Foundation: https://ksufoundation.org/

(0:00) Episode preview (2:44) Building connections and motivation in fund managers (6:04) Mutual value in manager relationships and balancing manager size (9:18) Tactical investment approach, TALF 2.0 trade, and partnering with nimble managers (13:09) Trust with the board and significance of TALF 2.0 trade (16:11) Portfolio leverage, diversifiers, and hedge fund strategies (20:11) Measuring portfolio diversification and the quarterly review process (23:41) Re-underwriting and portfolio structure with investment categories (27:36) Target return, portfolio levers, and dislocation opportunities (30:59) GP stakes, endowment strategy, and managing risk with smaller fund managers (37:16) Advantages of smaller hedge funds and Kansas State's investment strategies (42:12) Personal mission and Kansas State's impact (43:22) Closing remarks