How I Invest with David Weisburd E91: How Elite Endowments Invest in 2024
Sep 3, 2024
Renee Hanna, Managing Director of Investments at Baylor University, joins David Weisburd, an investment strategy expert, to discuss the endowment’s strategic approach to balancing public and private investments. They delve into the nuances of long-term sector focus, particularly in enterprise software and healthcare. The duo highlights the advantages of smaller venture funds and dives into the complex relationships between private investments and public indices. Emphasizing the importance of qualitative vetting and strong partnerships, they reveal how agile management enables superior performance.
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Baylor's Private Investment Growth
- Baylor's private investment allocation grew steadily after a portfolio reset in 2014.
- This reset involved selling and rebuying assets at secondary market prices, providing a fresh start.
Investment Focus and Hurdle Rate
- Focus on investments that can exceed a 15% net return hurdle and have long-term growth potential.
- Consider secular tailwinds in sectors like enterprise software and healthcare for long-term commitments.
Balancing IRR and Multiple of Invested Capital
- Prioritize IRR and multiple of invested capital when allocating to different strategies.
- A 2x return over five years can be more advantageous than a 3x return over 10 years due to compounding.