10X Capital Podcast E107: Caltech’s CIO’s $4.6 Billion Investment Strategy
Oct 29, 2024
Scott Richland, Chief Investment Officer at Caltech, discusses the nuances of managing a $4.5 billion endowment. He highlights the importance of disciplined investment strategies and the dynamics of a small team making high-stakes decisions. Richland also explores the balance between maximizing returns and managing risk, delves into lessons from historical financial crises, and shares insights on leveraging alumni networks for venture capital opportunities. His perspective on macro trends and private equity performance trends offers a wealth of knowledge for aspiring investors.
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Endowment Size Advantage
- Caltech's $4.6B endowment provides an advantage through nimbleness and attracting attention.
- Their size allows them to write smaller checks and be significant to funds, while still being noticed by managers.
Portfolio Optimization
- Caltech prioritizes liquidity over tax considerations when managing their taxable and non-taxable portfolios.
- The endowment, designed for perpetuity, favors illiquid private assets, while the taxable portfolio focuses on shorter-term needs.
Evergreen Fund Structures
- Evergreen funds provide stable capital for managers and liquidity control for LPs.
- This structure allows for better alignment of interests and more informed decision-making.