[REPLAY] Sarah Samuels – Framework and Rigor at NEPC (EP.264)
Aug 12, 2024
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Sarah Samuels, Head of Investment Manager Research at NEPC, brings a wealth of experience from both endowments and public pension funds. She discusses her unique investment framework that blends qualitative and quantitative analyses. Sarah shares insights on the significance of second-level thinking and aligning interests within investment committees. The conversation also delves into her commitment to DE&I efforts and mentoring future leaders through Girls Who Invest, highlighting the importance of adaptable strategies and critical questioning in navigating the complex investment landscape.
Sarah Samuels emphasizes the importance of a rigorous investment framework that integrates both qualitative and quantitative analysis for thorough manager evaluations.
Samuels highlights the critical nature of aligning interests between investment managers and investors to foster sustainable relationships and mitigate risks.
Her commitment to diversity through initiatives like Girls Who Invest aims to enhance representation in finance, thereby improving decision-making within the industry.
Deep dives
Sarah Samuels' Unique Background and Career Path
Sarah Samuels shares her unconventional journey into the investment industry, highlighting her humble beginnings and the opportunities that shaped her career. Initially, she chose to work as an administrative assistant at Wellington Management, a decision she believes opened doors to valuable experiences and insight in the investing field. Samuels emphasizes the importance of seeking out the best companies rather than focusing on titles when starting out, as her own rise through the ranks was facilitated by the quality of her employer. This strategic move eventually led her to become an analyst and pursue further education, including obtaining her CFA and MBA, all while developing a deep passion for investing and its societal impacts.
Experiences at Mass Prim and Wellesley College
Samuels reflects on her time at Mass Prim, where she learned the intricacies of asset management in a public pension fund environment. She highlights how the unique governance structure and the leadership encouraged innovation and responsibility among staff. This experience provided her the opportunity to manage significant assets and implement investment strategies that were both innovative and practical, particularly in private markets. Transitioning to Wellesley College's endowment, she adapted her quantitative approach to focus more on qualitative analysis, emphasizing the importance of relationships and strategic thinking in managing investments.
Investment Framework and Decision-Making Process
Samuels introduces her rigorous investment framework at NEPC, which combines qualitative insights and quantitative analysis to ensure thorough manager evaluations. This framework consists of various categories including organizational structure, investment philosophy, and performance metrics, allowing her team to assess investment managers rigorously. She stresses the importance of understanding the dynamic nature of performance and the necessity of context when evaluating potential investments. The methodology encourages critical thinking beyond surface-level data, aiming to anticipate future outcomes based on a deep understanding of market conditions and manager capabilities.
Aligning Interests in Investing
Samuels discusses the vital concept of aligning interests between managers and investors, particularly in private markets. She emphasizes the need for fair terms and succession planning to mitigate risks associated with key person dependencies and potential declines in performance. Additionally, she highlights the significance of considering fee structures and ensuring that incentives for both managers and investors are aligned to promote favorable outcomes. This alignment is crucial in fostering sustainable investment relationships that support long-term strategic goals.
Focus on Diversity and Education in Finance
The conversation also explores Samuels' commitment to diversity and education in the finance industry, particularly through her work with initiatives like Girls Who Invest. She explains the program's aim to bring non-traditional candidates into investment roles by providing them with educational resources and practical experience. Samuels expresses her belief that increasing diversity within asset management leads to better decision-making and broader perspectives in investing. She recognizes the current challenges facing the industry in terms of entrenched biases but remains hopeful about the potential for change through targeted initiatives and awareness.
Sarah Samuels is the Head of Investment Manager Research at NEPC where she oversees teams across public equities, credit, hedge funds, and private markets for the $1.5 trillion investment advisory juggernaut. Prior to joining NEPC three years ago, Sarah worked at the senior level of both a top notch endowment and a public pension fund. She sought to bring the best of both worlds to her role at NEPC. Our conversation covers Sarah’s early career investing, time in the allocator seat at Mass PRIM and Wellesley College, and decision to join NEPC. We discuss her key investment themes, investment framework blending qualitative and quantitative analysis, second-level thinking, CIO mindset, alignment of interest, private equity allocations, and investment committees. We close discussing Sarah’s work on DE&I and her involvement in Girls Who Invest.