Episode summary
Notre Dame’s Former CIO on Sequoia, Venture Capital & Concentration
How I Invest With David Weisburd
· · Hosts: David Weisburd · Guests: Scott Malpass
Summary
Scott Malpass argues that the best investment outcomes start with alignment: between the institution, its board, and the investment team, and between a manager’s incentives and long-term value creation. He says his 32 years at Notre Dame were unusually effective because the governance structure was coherent, the culture was aligned, and the team could focus on risk, liquidity, and manager selection instead of internal politics.
He describes investing as a people business and says he learned to identify strong managers by looking for transparency, humility, consistency, and a coherent philosophy. The best firms, in his view, can explain exactly what they do and do not do, admit mistakes, and build cultures that survive leadership transitions. He also argues that size is often the enemy of performance: many firms become too large, drift from their strategy, and rely too much on management fees.
Malpass says Notre Dame’s relationship with Sequoia illustrates the value of long-term partnerships. He preferred paying premium carry for exceptional managers and often negotiated for capacity rights instead of lower fees. At Grafton Street Partners, he has carried those same principles forward with a more concentrated, equity-focused model built around long relationships and select private and public investments.
Key takeaways
- Scott Malpass says the biggest lesson from Notre Dame was that strong alignment between a board, administration, and investment team makes “anything is possible.”
- He believes the best managers are transparent, humble, and coherent about what they do, what they don’t do, and where they have edge.
- Malpass argues that firm size is often the number-one thing that ruins performance because managers get sloppy, greedy, and misaligned.
- He says Notre Dame was willing to pay premium carry for exceptional managers and sometimes valued capacity rights more than lower fees.
- He thinks many institutional portfolios are overdiversified and would benefit from being more concentrated, especially when the goal is long-term compounding.
Notable quotes
“I have realized over that time just anything is possible when you have that kind of commitment alignment on any investment approach”
“I learned early on it was a people business by watching some of the mistakes people made”
“they tell you what they do, what they don't do, what they're good at, what they're bad at”
“I just think if I write a book someday on the 10 most important investment principles and what ruins a firm, size is number one”
“We had no problem paying up for excellence”
How the episode opens
So Scott, you're considered one of the very top CIOs of the last generation, having been CIO for 32 years at Notre Dame. Let's start with a simple one. What is the number one lesson that you learned while being CIO at Notre Dame?
Well, David, I was very fortunate to come back to a place where I had gone to school, so I was an alum. I knew the culture, I knew the campus, I knew the values as a Catholic university. And so very early on it was sort of easy for me to fold in when there was such alignment of the purpose of the place between the board, the administration, students and faculty, alumni, all the different constituencies of university, each of whom, by the way thinks they run it, right?
But we're so tied together there by this common sense of purpose and the alignment we had in establishing our investment goals. We had such strong alignment with our entire governance structure. I have realized over that time just anything is possible when you have that kind of commitment alignment on any investment approach.
So I was very fortunate to have that. I I would hear stories all the time from my peers about their they hated their board or their investment committee and they're interfering and the president would offer stock advice and it was just I didn't have any of that. It was incredibly clean.
So I was very fortunate that way. John Austin, founding CIO at Berkeley, asked me to ask you, how long was your IC chair the chair on your investment committee?
I was fortunate. I worked for two gentlemen, Bob Wilmouth from First National Bank of Chicago who basically brought me in and then Jay Jordan who's sort of a private equity icon was chair really most of the rest of that period.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- venture capital
- capital allocation
- institutional investing
- concentration
- fund manager selection
Companies and tickers mentioned
- Grafton Street Partners
- Sequoia Capital
Watch the episode
Watch “Notre Dame’s Former CIO on Sequoia, Venture Capital & Concentration” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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