E62: Babson College's $700M Endowment on Venture Capital

Trish DiGirolomo, investment manager at Babson College sits down with David Weisburd to discuss scaling Babson College’s endowment via disciplined strategy and process. In addition, they discuss the advantages of patience and a focus on cash on cash returns, criteria for manager selection, and leveraging experienced alumni in the investment process. (0:00) Introduction to Trish DiGirolomo's investment strategy and background (1:15) Yale's model, private equity, and Babson Endowment's growth (2:08) The role of private equity in total returns and university operations (3:19) Comparing endowments and evergreen capital's competitive edge (4:02) Analyzing MOIC, DPI, and IRR in performance metrics (5:10) Babson's policy and insights on post-IPO holdings (7:02) The inside advantage and skills of private vs. public managers (10:24) Developing patience and exit strategies in venture capital (13:08) Babson's approach to secondaries and reasons for selling (16:11) Strategies for accessing and adding value to oversubscribed funds (18:49) Utilizing Babson's alumni network across diverse asset classes (20:52) MBA analyst positions and GP manager sourcing techniques (22:49) Assessing key criteria and managing portfolio concentration (24:22) Sponsor: DEEL (26:53) Exploring diversified alpha and underwriting return thresholds (29:15) Babson's allocation strategy for private markets and team importance in selection (35:01) High conviction strategies and detailed manager selection process (38:34) The significance of corporate governance for LPs (39:07) Sponsor message and newsletter promotion (39:34) Deliberating nonconsensus decisions in LP manager selection (41:59) The pitfalls of likability in investment decisions (44:14) Challenges of investing without manager access and VC brand value (47:29) Addressing generational transitions in VC firms (47:43) Conclusion with Babson's mission and future outlook (48:14) Outro and call to action