In Good Company with Nicolai Tangen Robert Wallace: Managing Stanford’s Endowment, Balancing Risk, and Driving Innovation
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Aug 27, 2025 In this engaging conversation, Robert Wallace, CEO of Stanford Management Company, shares his unique journey from professional ballet dancer to leading Stanford's $40 billion endowment. He discusses the challenges of managing university funds, particularly in a changing market, and the importance of strong investment partnerships. Wallace emphasizes how passion for the work drives success, beyond just financial gain, and reveals Stanford's innovative investment strategies that significantly impact students and research.
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Dual Mandate Shapes Risk Target
- Stanford balances two goals: materially supporting current students while preserving purchasing power for future generations.
- That dual mandate pushes an equity-biased portfolio (roughly 70/30) to target long-run returns near 9%.
Consolidating From 300 To Under 100
- Wallace found Stanford was dramatically over-diversified with 300 external partners on a $20bn portfolio and cut that number substantially.
- He consolidated to fewer than 100 high-conviction partners to build deeper, trustful relationships and improve returns.
Bull Market Stresses The Endowment Model
- A long US public equity bull market has compressed the relative attractiveness of diversified endowment portfolios.
- High valuations in US equities can make single-asset equity strategies look better in the short run, challenging the endowment model's perception.