How I Invest with David Weisburd
E107: Caltech’s CIO’s $4.6 Billion Investment Strategy
Oct 29, 2024
Scott Richland, the Chief Investment Officer at Caltech, shares insights about managing a $4.6 billion endowment. He discusses the importance of strategy discipline in asset management and how they select direct investments. The conversation touches on Caltech's unique access to top venture funds and the balance between risk and stability in institutional investments. Richland highlights strategies for managing market dynamics and emphasizes the value of emotional resilience. He also reflects on fostering a team atmosphere that celebrates successes and learns from failures.
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Quick takeaways
- Caltech's $4.5 billion endowment employs a conservative investment strategy focused on risk management and stability to support its operational budget.
- The endowment's investment decisions are guided by thorough due diligence and collaboration among a 14-member committee, ensuring alignment with financial objectives.
Deep dives
Investment Strategy of Caltech's Endowment
Caltech's endowment, valued at $4.5 billion, maintains a diversified portfolio structured to withstand volatility and support its operational budget. The allocation includes around one-third in global public equities, with 25% in private equity split across buyouts, growth, and venture capital. Additionally, alternative securities make up 25%, consisting of non-correlated assets like aircraft leasing and distressed debt, while real assets account for 12%. The endowment's strategy reflects a conservative approach, focusing on risk management and long-term growth to ensure stability for the institution's needs.
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