E208: CIO Frank Mihail on Running an $8 Billion Portfolio with 3 People

Sep 3, 2025

Frank Mihail, Chief Investment Officer of North Dakota's Department of Trust Lands, shares insights on managing an $8 billion portfolio with a lean three-person team. He discusses their focus on alternatives for 75% of the portfolio, the advantages of evergreen fund structures, and the strategic use of portable alpha. Mihail emphasizes the team's mission to fund public schools, revealing how their concentration on risk management and behavioral finance shapes investment decisions. He also highlights the role of collaboration in enhancing their investment approach.

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ANECDOTE

Three-Person Team, Concentrated Book

Frank runs the entire $8B portfolio with a three-person team and keeps the book tight at 40 line items.
He emphasizes concentration to generate manager-level alpha rather than over-diversifying.

INSIGHT

High Alternatives With Liquidity

The trust targets 45% to private markets and 30% to long-short strategies, totaling ~75% in alternatives.
Despite high alternatives, about 90% of the portfolio still provides liquidity via open-end structures.

ADVICE

Prefer Evergreen Funds For Operational Ease

Use evergreen/open-end structures to reduce operational burden when staff is small.
Keep a concentrated number of line items to avoid heavy legal, account, and capital call workload.

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In this episode of How I Invest, I speak with Frank Mihail, CIO of the North Dakota Department of Trust Lands, which manages an $8B sovereign wealth endowment built to fund public schools. Frank shares how his three-person team runs a highly concentrated portfolio with 75% in alternatives, why they prefer evergreen fund structures for liquidity, and how they think about portable alpha, co-investments, and core-satellite strategies. We also discuss the trust’s broader mission: having already distributed $2B to North Dakota schools, with the long-term goal of covering the entire cost of public education.

Highlights:

The origins and purpose of the North Dakota Trust Lands sovereign wealth fund
How the endowment has grown to $8B in investable assets and $12B total
Why 75% of the portfolio is in alternatives, including private equity, venture, hedge funds, real estate, and infrastructure
The case for evergreen fund structures over traditional closed-end vehicles
Trade-offs between co-investments vs. manager selection for concentrated portfolios
How portable alpha works in practice—and why North Dakota uses a “portable beta light” approach
The role of fund-of-funds in reducing operational complexity and building core-satellite strategies
Behavioral finance and why avoiding mistakes during volatility matters more than chasing marginal alpha
The trust’s long-term mission to support public schools and reduce taxpayer burden

Guest Bio:

Frank Mihail is the Chief Investment Officer of the North Dakota Department of Trust Lands, where he oversees the investment of the state’s sovereign wealth endowment. Before joining North Dakota, Frank was an Investment Officer at the New Mexico Public Employees Retirement Association (PERA), where he managed hedge fund strategies. He holds deep expertise across public and private markets, with a focus on building resilient, high-performing institutional portfolios.

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(0:00) Preview (1:56) Portfolio Construction, Asset Allocation, and Liquidity Strategies (4:45) Evergreen Funds: Benefits and Co-Investment Strategies (10:54) Strategies for Private Equity and Hedge Fund Exposure (18:30) Vanguard's Impact on Indexing and Portable Alpha Explained (23:29) Fund of Funds and Core-Satellite Investment Approaches (29:22) Behavioral Finance in Investment Decision-Making (31:25) Key Investment Thesis and Illiquidity Valuation (36:57) RVK's Role and Economic Impact on Public Education (42:05) Closing remarks