Lessons from the 2008 Financial Crisis

In this episode of How I Invest, I dive deep into a discussion with John Skjervem, Chief Investment Officer at Utah Retirement Systems (URS), to uncover the unique governance and investment strategies behind one of the most innovative public pension funds in the United States. John shares his insights on governance structures, private equity allocations, the benefits of a "fishbowl-free" decision-making process, and his approach to alternative energy investments. Whether you're curious about pension fund management or the future of disruptive energy investments like nuclear fusion, this episode is a masterclass in strategic thinking and long-term investing.

Highlights: Governance Matters: Why URS’s closed-door investment meetings create better outcomes compared to traditional public pension governance.

Transparency vs. Returns: How excessive transparency can lead to political grandstanding and ultimately harm long-term investment performance.

Asset Allocation Strategy: A deep dive into URS’s allocation, including a 14% allocation to private equity with significant exposure to venture capital.

Direct Real Estate Investments: How URS has built a successful real estate portfolio, reducing fees and maintaining long-term control over assets.

Energy and Infrastructure Investments: The role of direct investments in oil, gas, and alternative energy as an inflation hedge.

The Case for Venture Capital: Why URS prioritizes venture capital investments over private credit to maximize returns.

Betting on Nuclear Fusion: The potential for a 100x return on URS’s investments in fusion energy and the long-term implications for the energy sector.

Size vs. Agility: Why smaller funds like URS have an advantage in private markets despite their scale limitations.

Lessons from the Global Financial Crisis: How John’s approach to risk management and asset allocation was shaped by 2008.

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Guest Bio: John Skjervem serves as the Chief Investment Officer at Utah Retirement Systems, where he oversees over $50 billion in assets. With prior experience managing larger funds like the Oregon Public Employees Retirement Fund and Northern Trust's wealth business, John brings a wealth of expertise to his current role. Known for his innovative governance approach and deep knowledge of alternative investments, John is passionate about achieving long-term success for URS beneficiaries.

Our Podcast now receives more than 300,000 downloads a month. Are you interested in sponsoring an episode? Please email David Weisburd at dweisburd@gmail.com.

We’d like to thank @JuniperSquare @ReedSmith for sponsoring this episode!

#VentureCapital #VC #Startups #OpenLP #AssetManagement

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SPONSOR: Juniper Square is dedicated to transforming the private markets investing experience. The company provides a full range of modern, connected fund technologies and services for over 2,100 private markets GPs across fundraising, reporting, fund administration, treasury, compliance, and business intelligence. Today, over $1 trillion of assets and 600,000+ LP accounts are managed through Juniper Square software and fund administration services. Learn more at www.junipersquare.com.

SPONSOR: Reed Smith is a dynamic international law firm dedicated to helping clients move their businesses forward. With an inclusive culture and innovative mindset, Reed Smith delivers smarter, more creative legal services that drive better outcomes for their clients. Their deep industry knowledge, long-standing relationships and collaborative structure make them the go-to partner for complex disputes, transactions, and regulatory matters. Learn more at www.reedsmith.com.

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Stay Connected: Twitter: David Weisburd: https://x.com/DWeisburd

LinkedIn: David Weisburd: https://www.linkedin.com/in/dweisburd/ John Skjervem: https://www.linkedin.com/in/john-d-skjervem-cfa-4698794/

Links

Utah Retirement Systems: https://www.urs.org/

Questions or topics you want us to discuss on How I Invest? Email us at dweisburd@gmail.com.

(0:00) Episode preview (1:00) Asset allocation and governance at Utah Retirement Systems (4:07) Governance structure at Utah Retirement Systems (9:25) Long-term investment challenges (10:57) Sponsor: Juniper Square (11:30) Private equity and real estate in asset allocation (15:44) Managing a $50 billion fund (16:25) Sponsor: Reed Smith (17:30) Investment check sizes and advisory roles (20:31) Comparing Utah Retirement Systems with Alaska Permanent Fund (22:11) Lessons from the 2008 financial crisis (23:57) Exploring high-risk investments: Fusion portfolio (26:10) Closing remarks