Episode summary
On the Road in Waco, Texas | Inside Baylor University with CIOs, Allocators & Students
Dakota Live!
· · 1 hr 24 min · Hosts: Robert Morier · Guests: Dave Morehead, Renee Hanna, Chris Dion, Michael Holmberg
Summary
The conversation centers on how Baylor’s investment office has shifted from emphasizing downside protection after the financial crisis to pursuing more right-tail upside today, while still keeping liquidity and discipline at the core of the portfolio. The guests describe an approach that favors conviction, concentration, and long-dated sectors with structural tailwinds, rather than spreading capital too thin across too many positions.
A recurring theme is that relationship-building is part of the investment process, not separate from it. The panel argues that sharing ideas across LPs, OCIOs, and managers creates better decisions, better alignment, and ultimately better outcomes for institutions and their beneficiaries. They also stress that character matters, but it is difficult to quantify prospectively, so they rely on extensive references, repeated interactions, and time-tested behavior.
On manager selection, the guests make a case for emerging managers and smaller private equity funds, saying these teams can be easier to underwrite because decision-making is more concentrated and the opportunity set is less crowded. They also explain why Baylor has avoided private credit: the expected return, liquidity profile, and duration do not fit the university’s needs, and the guests see more attractive cash-on-cash opportunities elsewhere in the private markets.
Key takeaways
- Baylor’s investment office has shifted from post-crisis left-tail protection toward finding more right-tail upside without abandoning risk discipline.
- The guests said they prefer concentrated private market bets, with roughly $3 million of underlying company exposure and GP portfolios of about 10 to 15 assets.
- The panel argued that smaller and emerging managers can be attractive because the decision-making group is tighter and easier to underwrite.
- The guests said they do not invest in private credit because it does not offer enough upside for the duration and liquidity cost relative to other private strategies.
- The panel treats references, alignment, and repeated behavior as the main ways to assess character and build trust with managers and LP peers.
Notable quotes
“our focus was really on trying to limit losses sort of come what may”
“invest with conviction and what I mean by that is in the past we had historically had too many line items”
“there's a lot of ways to make and lose money”
“All the paper in the world can't protect you from a bad person”
“we don't think that we're getting paid for the risk that we're taking in private credit”
How the episode opens
Welcome to the Dakota Live podcast. I'm your host, Robert Morier. The goal of this podcast is to help you better know the people behind investment decisions.
We introduce you to chief investment officers, manager research professionals, the occasional asset manager, and other investment industry leaders to help you sell in between the lines and better understand the investment sales ecosystem. If you're not familiar with Dakota and our Dakota Live content, you can find more about our business at dakota.com. Before we get started, I need to read a brief disclosure.
This content is provided forformational purposes and should not be relied upon as recommendations or advice about investing in securities. All investments involve risk and may lose money. Dakota does not guarantee the accuracy of any of the information provided by the speaker who is not affiliated with Dakota.
Not a solicitation, testimonial, or an endorsement by Dakota or its affiliates. Nothing herein is intended to indicate approval, support, or recommendation of the investment adviser or its supervised persons by Dakota. Today's episode is brought to you by Dakota Marketplace.
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Well, good afternoon everyone. Uh my name is Robert Morier. I'm the host of the Dakota Live podcast.
I'm a professor at Drexel University and I'm very proud to be recording today from Baylor University in Waco, Texas.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- endowment management
- manager research
- portfolio construction
- relationship-driven investing
- private credit discipline
Companies and tickers mentioned
- Baylor University
- Brockenbrough
- Neuberger Berman
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Dakota Live!, this episode and its artwork belong to Robert Morier. Octagon is not affiliated with the show; this page is an independent summary.
