Scott Wilson - Non-Traditional Endowment Investing - [Invest Like the Best, EP.297]

Invest Like the Best with Patrick O'Shaughnessy

My guest today is Scott Wilson. Scott is the CIO of Washington University’s endowment, which manages over $13 billion. In this conversation we discuss WashU’s non-traditional endowment model and cover a variety of asset classes and geographies. We talk about the qualities Scott looks for in managers, lessons from investing in Asia and emerging markets, and red flags in the venture space. Please enjoy this conversation with Scott Wilson.

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Show Notes

[00:02:38] - [First question] - What he learned about markets from quant fixed income trading

[00:04:42] - How his experience shaped his degree of skepticism of the world

[00:05:15] - The story that brought him to Grinnell College

[00:06:45] - What his education was like back in 2010 and what seemed sensible and insane when he arrived

[00:09:37] - His philosophy around trying to have more direct ownership

[00:12:03] - Lessons learned about choosing good partners and doing it effectively over time

[00:13:51] - Things that are most enjoyable about getting to know new managers

[00:16:17] - Why they spend so much time in frontier and emerging markets

[00:18:21] - Lessons learned from investing in China and thoughts on it today

[00:23:16] - The worst things he sees from venture investors

[00:24:39] - Whether or not venture investors should care more

[00:27:55] - What percentage of investors in private equity are investors versus just involved to try and engineer returns

[00:28:59] - His impressions on hedge funds and the evolution of the hedge fund model

[00:31:18] - The role that credit can play in a portfolio like the one he manages now

[00:36:34] - Everything he’s learned about asset managers acting as asset gatherers

[00:39:35] - Ways he fights convergence and tracking error overseeing so much capital

[00:41:49] - What it’s like to go through the bad side of tracking error

[00:45:43] - What he sees as a normal level of tracking error for endowments and foundations

[00:46:59] - Why such big pools of institutional capital tend to look so similar

[00:48:10] - Whether or not real estate sits somewhere between stocks and bonds

[00:51:10] - Colliding managers in a fun and spirited way at meetings

[00:52:16] - An investing trip from his career that he finds most memorable

[00:52:50] - The kindest thing anyone has ever done for him