E73: John Merrill on GroveStreet’s $10.5 Billion Investment Strategy

John Merrill, Partner at GroveStreet sits down with David Weisburd to discuss GroveStreet’s $10.5B SMA model. In addition, they talk about the keys to building long-term SMA relationships, a highly selective set of criteria for managers and reasons why GP’s should prefer rigorous, discerning LPs vs. fast-followers. (0:00) Introduction to John Merrill and Grove Street's investment philosophy (1:00) Overview of Grove Street and their investment focus (2:50) Benefits and problems solved by SMAs (5:03) Importance of alignment in investment management (6:30) Investment process and criteria for selecting and rejecting funds (11:29) Criteria for selecting clients and maintaining relationships (13:25) Benefits of Grove Street's boutique model (14:44) Building a venture portfolio for new clients (16:24) John Merrill's experience with David Swenson (18:08) David Swenson's investment philosophy and influence (20:14) The impact of Yale's name and securing anchor investors (23:41) The value of rigorous and discerning LPs (25:11) Co-investing strategies and characteristics of top LPs (31:02) Recommendations and lessons learned in asset management