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Capital Allocators – Inside the Institutional Investment Industry

Jan 22, 2018

Bill Spitz was the longtime head of Vanderbilt University’s endowment before retiring, for the first time, in 2007. He has received numerous lifetime achievement awards for his work and is one of the legends in the business.  After failing in his retirement, he joined Diversified Trust Company, a wealth manager with $6.5 billion in assets under management that he co-founded back in 1994.

Our conversation discusses managing an endowment in the early years, implementing unconventional investments, creating an edge as an allocator, selecting managers and conducting due diligence, exiting managers, challenging current landscape, and working with families.

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Show Notes


1:30 – Early days at Vanderbilt and the landscape for university investment offices

3:17 – Career before working at Vanderbilt

3:59 – Transition from Wall Street to going back to his alma mater

4:48 – Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment

5:23 – Out of the box ideas when he first got started

6:25 – Convincing the board to approve unconventional ideas

8:28 – Why Bill retired

            9:28 – Diversified Trust White Papers

9:31 – What is the edge that allocators have when it comes to investing

            9:33 – Paul Johnson and Paul Sonkin podcast episode

            9:35 – Pitch the Perfect Investment: The Essential Guide to Winning on Wall Street

            10:05 – Gaining an Edge in Investing 

12:30 – Where can skill from an allocator perspective be applied

14:32 – Judging the skill of managers as an allocator

15:16 – Looking out to the future, how will the endowment model stack up against the traditional 60/40 portfolio 

17: 47 -  How do you manage clients when your strategy may not be keeping up with the S&P 500 in the short term 

19:15 – Thoughts on bitcoin 

20:00 – How Bill was able to get involved with Diversified Trust while working at Vanderbilt 

21:47 – Differences in managing endowments vs taxable pools of capital 

23:22 – Stories that either derail an investment process or educate someone to stay the course 

24:23 – Manager selection process and what Bill looks for when choosing the right one 

28:01 – Bill’s view on exiting managers 

29:55 – How do you measure the evolution of a manager’s investing strategy, especially as the market changes 

31:41 – What is different today about investing vs when Bill first started 

33:56 – Do alternative and emerging investment streams deliver the returns that many hope for 

35:13 – Why don’t endowments, foundations, or pension funds feel comfortable with moving chunks of their portfolio to cash 

37:00 – How does Bill think about the balance of investments with higher return potentials against their higher costs 

38:13 – Any categories that really pique Bill’s interest 

39:22 – What does the asset management industry look like in 10-20 years from now 

41:56 – What should aspiring money managers think about as they move forward in this business

43:09 – What Bill is most proud of in his career

43:54 – Favorite sports moment

45:01 – What teaching from Bill’s parents has most stayed with him

            45:14 – Battle Hymn of the Tiger Mother

            45:18 – The Triple Package: How Three Unlikely Traits Explain the Rise and Fall of Cultural Groups in America

46:10 – What information does Bill read that he gets a lot out of

            46:20 – The Economist

            46:33 – Wall Street Journal

            46:34 – Bloomberg

46:45 – Life lesson that he wished he knew a lot earlier

47:29 – In his waning days, what advice would Bill give himself today