Episode summary
On the Road in Waco, Texas | Inside Baylor University with CIOs, Allocators & Students
Dakota Live!
· · Hosts: Robert Morier · Guests: Dave Morehead, Renee Hanna, Chris Dion, Michael Holmberg
Summary
Baylor’s investment office describes its philosophy as adaptive rather than fixed: after the financial crisis, the priority was to truncate the left tail and rebuild trust, but with the university growing, the focus has shifted toward capturing more right-tail upside without abandoning downside protection. Renee Hannah said the private portfolio is built around three rules: earn a liquidity premium, invest with conviction in a smaller set of best GPs, and back sectors with long-term tailwinds. Dave Morehead framed the approach as a discipline built over 15 years, not a static policy.
The discussion repeatedly returned to relationships as a practical investment tool. The panel argued that allocator-to-allocator dialogue creates perspective, helps refine portfolio construction, and can even improve social outcomes because these are mission-driven institutions. Chris Dion and Morehead both said sourcing and manager selection are less about exclusivity than about trust, shared expectations, and knowing who you are invested alongside with when things go wrong. On character, they said it is not easily quantified, but it can be triangulated through references, repeated behavior, and direct communication.
The group also explained why Baylor and Brockenbrough avoid private credit. Morehead argued the risk is not adequately compensated, while Dion said the return profile does not fit their emphasis on cash-on-cash outcomes and longer-duration private equity. Emerging managers were viewed as attractive because they are hungrier, more concentrated, and easier to underwrite early, even if that takes more qualitative work. Michael Holmberg added that strategic LP relationships work when both sides bring information, transparency, and a clear understanding of risk.
Key takeaways
- Dave Morehead said Baylor has shifted from prioritizing downside protection after the financial crisis to seeking more right-tail upside while keeping left-tail discipline.
- Renee Hannah said Baylor’s private portfolio is built around getting paid for illiquidity, concentrating capital in best GPs, and backing sectors with long-term tailwinds.
- Chris Dion said allocator relationships matter because they provide perspective, shared ideas, and a way to compare different portfolio “recipes” without requiring identical approaches.
- Morehead said Baylor has avoided private credit because it does not think the asset class pays enough for the risk and would cap upside the university now wants.
- Holmberg and the panel said emerging managers can be easier to underwrite on character and alignment because fund one and fund two are often led by a small, identifiable decision-making team.
Notable quotes
“we had some trust repair to do with the investment committee uh with the board just in you know more broadly”
“our focus was really on trying to limit losses sort of come what may”
“we must have a liquidity premium to invest in the asset class”
“I mean, the commodity that we trade is is is our ideas”
“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
- ocios and allocators
- manager research due diligence
- risk conviction and portfolio construction
- private credit discipline
Companies and tickers mentioned
- Baylor University
- Brockenbrough
- Neuberger Berman
- Drexel University
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.
