Capital Allocators – Inside the Institutional Investment Industry David Morehead – Top Down Allocation at Baylor (EP.381)
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Apr 22, 2024 
David Morehead, the CIO at Baylor University, oversees a $2.2 billion endowment. He discusses his innovative thematic top-down approach to investment, emphasizing risk management and portfolio construction. Morehead shares insights on the significance of small-cap investments and the evolution from over-diversification to a more concentrated strategy. He also reflects on his diverse investment background and the role of AI in enhancing capital allocation. Besides finance, he opens up about his hobbies and the importance of kindness in professional relationships.
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Diverse Career Path
- David Morehead's career journey spanned diverse areas like fixed income, options, equities, and energy.
- Each new role felt like being the "dumbest person in the room" due to the specialized vocabulary of each niche.
Path to Baylor
- Morehead's move to Baylor was driven by a desire for a new challenge and a better work-life balance.
- His wife's rapport with college students and encounters with those facing difficulties further influenced their decision.
Industry Jargon and Endowment Challenges
- Every niche in finance has its own unique language and vocabulary, creating communication barriers.
- Managing an endowment, while similar to other portfolio management, presents a unique challenge in cash flow and liquidity.