Episode summary
Cultivating a Venture Program Without Chasing the Hype
Swimming With Allocators
· · Hosts: Alexa Binns, Earnest Sweat · Guests: Mike Kakenmaster, Chuck Daly
Summary
A guest from Loyola University Chicago described how a small endowment built a private capital program by starting with data, staying patient, and avoiding the urge to chase whatever was hottest in venture at the time. He said his background across hedge funds, a family office, and endowment investing taught him that no single asset class can solve every portfolio need, and that a generalist view helps spot risks and opportunities across buyout, credit, hedge funds, and venture. He also argued that market attention rotates: hedge funds were out of favor when private markets were drawing more capital, but liquidity pressure in privates is now making hedge funds more attractive again.
On Loyola’s venture effort, the guest said the school doubled its private capital allocation from about 10% to 20% and chose to build deliberately rather than rush into brand-name funds. He emphasized that early-stage venture track records can be misleading because marks arrive before outcomes are clear, and that investors should focus instead on portfolio construction, reserves, access, networks, and founder quality. He said Loyola prefers smaller and emerging managers, where the firm can understand the strategy, ask better questions, and be a meaningful LP without writing oversized checks.
A regulatory-focused guest added that first-time managers need to treat fundraising like running a real business, with clear operational infrastructure, conflict management, and disclosures. The core message was that strong venture programs are built slowly, with discipline around pace, transparency, and manager selection rather than headline chasing.
Key takeaways
- Loyola doubled its private capital allocation from about 10% to 20% and chose to grow into the program over time, not force commitments quickly.
- The guest said venture track records are especially hard to read early because marks and vintage-year labels can mislead before exits or durable operating data appear.
- He prefers smaller and emerging managers because Loyola can be a meaningful LP, get better access, and invest in inefficient parts of the market.
- The guest said a generalist allocator can better compare venture against buyout, credit, and hedge funds and see when market trends are rotating.
- A regulatory guest said first-time fund managers need a real business infrastructure and a conflicts framework before they scale fundraising.
Notable quotes
“what do the numbers tell us? And this isn't I know we're going to talk about venture, but this is kind of every asset class”
“it's just knowing that there's more to life than one asset class”
“the thing with with venture that that you that we've had to get used to is that understanding that you don't really know what you got”
How the episode opens
Welcome to Swinging with Alligators, — The VC podcast from the LP perspective — With your hosts Alexa Bins — And Ernest. You ready? Let's dive in. Michael, we've just heard your uh very relevant background. Um you've got hedge fund, family office, and now um Loyola. Can you tell us any through line any learnings um going from publics to now focusing on privates? Yeah, I think you know
Probably the the biggest through line obviously being in the LP seat my entire career. It's kind of the only thing I've known. Um but you know, you look at kind of the different things I've done at every stage of my career and it's just kind of a constant building of knowledge and skills.
When I started out in the at the fund of hedge funds, um my my role was very data and quantitative driven. I think that's been a pretty consistent throughine. For better or worse, I say I always start with uh what do the numbers tell us?
And this isn't I know we're going to talk about venture, but this is kind of every asset class because today I'm still looking at hedge funds and public equity funds and private equity funds across um you know the uh the spectrum of venture growth and buyouts. So it's always I'm always curious as to you know what sort of data do we have and what can we learn from that and how does that kind of build and structure our due diligence and our understanding of a manager um and and kind of what questions we want to ask what things we want to monitor. Uh so very you know data a high emphasis on data has been a big part but um you know starting out the fund of hedge funds obviously you're looking at typically you know equity or credit driven strategies these are you know different degrees of of trading and portfolio construction and so you learn a lot about I think just capital markets from that lens.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- venture capital program building
- endowment investing
- lp vs private markets capital allocation
- emerging managers due diligence
- gp operational infrastructure and governance
Companies and tickers mentioned
- Loyola University Chicago
- Sidley Austin LLP
Watch the episode
Watch “Cultivating a Venture Program Without Chasing the Hype” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Swimming With Allocators
Swimming With Allocators, this episode and its artwork belong to Earnest Sweat, Alexa Binns. Octagon is not affiliated with the show; this page is an independent summary.
