Episode summary
How The University of Cambridge Built Their Privates Portfolio
How I Invest With David Weisburd
· · 30 min · Hosts: David Weisburd · Guests: Sam Sturge
Summary
Sam Sturge said Cambridge rebuilt its private equity program around a simple mission: preserve and grow the endowment for centuries, with a 4% distribution rate and a target return of inflation plus 5% for the whole fund. That requires a meaningful allocation to risk assets, and he argued that private equity, especially buyout and venture capital, is the best place to seek that return profile.
He framed the job as a people business built on long relationships, saying Cambridge looks for managers motivated by outlier returns rather than asset gathering. The endowment’s edge, in his view, is not just capital size but selectivity: around 30 private market relationships, a willingness to back managers for multiple fund cycles, and patience to wait for repeatable skill rather than chase the hottest name.
On venture, Sturge said scale can be an advantage or a constraint depending on the manager’s strategy, but Cambridge tries to use its own long-term capital and university ecosystem as an advantage. He also pushed a contrarian view on the DPI slowdown: if other LPs are stepping back, Cambridge sees an opportunity to be offensive, manage liquidity carefully, and capture market share while remaining disciplined on valuation, simplicity, and incentives.
Key takeaways
- Sam Sturge said Cambridge targets inflation plus 5% for the endowment, which he thinks requires a meaningful allocation to private equity.
- He argued that the best managers are driven by competitiveness and a desire to win on returns, not by asset gathering or fee growth.
- Sturge said Cambridge’s advantage is selectivity: roughly 30 relationships across buyout and venture, with a focus on repeatable skill over headline performance.
- He said the DPI slowdown could be an opportunity because fewer LPs competing may improve access to top general partners.
- In venture, he said Cambridge tries to use its long-term capital and university research base to attract managers and support portfolio companies.
- Sturge said the key to preserving alpha is simplicity, long time horizons, and disciplined incentives across both LPs and GPs.
Notable quotes
“It is to preserve or increase the real value of the endowment for not just decades but centuries to come”
“It is a people business. A private fund can last for 15 years or more”
“the key decision makers at an investment organization are they motivated to deliver outlier returns rather than necessarily build a large business”
How the episode opens
So Sam, you've had an incredible career going from Morgan Stanley to then partners capital, but I want to start with how did you came to run private equity at Cambridge University?
Six years ago now, our CIO had joined a few months before was looking to rebuild the whole investment team and also just looking to increase the allocation to private equity substantially. And I think all those kind of factors really kind of married with I guess my long-term ambitions and motivations which for some reason I love private equity and the ability to kind of take this brand and use that to leverage to build a world-class portfolio was just too good an opportunity to pass up.
You were building for one of the most historic institutions in the world but you were more or less building it from scratch. How did you go about doing that? At the core of it like what is the mission objectives for the endowment as a whole?
It is to preserve or increase the real value of the endowment for not just decades but centuries to come. We have a distribution rate of 4% and we want to have a margin of safety. So that means we have a target return for the whole endowment of inflation plus 5%.
I I'll admit that's a relatively high return target and so it's therefore really important for us to have a meaningful allocation to risk assets. um we believe that priority should have the highest return out of all asset classes and so naturally makes sense for us to have a large allocation to the asset class. Why do we think that's the case?
Um I think firstly I'm going to I think private equity for me I'm just trying to keep it simple because there's many different strategies.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private equity allocation
- endowment strategy
- gp incentives
- venture capital structural alpha
- private equity nav marks
Companies and tickers mentioned
- MS
- Morgan Stanley
- Partners Capital
Watch the episode
Watch “How The University of Cambridge Built Their Privates Portfolio” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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