What Harvard Got Wrong & The Hot Ball of Liquidity w/ Jeff Park
Episode publishedPodcast: Lumida Wealth : Non-Consensus...Lumida Wealth : Non-Consensus Invest Beyond the Ordinary
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Welcome to non consensus investing. I'm Ram Alowalia, your host and CIO at Lumida Wealth, where we specialize in the craft of alternative investments. At Lumida, we help guide clients through the intricacies of managing wealth so they don't have to shoulder the burden alone. Through this podcast, we draw back the curtain to reveal the strategies employed by the best in the business for their clients, so that you too can invest beyond the ordinary. Welcome to the next episode of Lumida nonconsensus investing. I'm your host, Ram Alalaya, CIO of Lumida Wealth. I'm thrilled to be joined by a speci
Thanks, Ryan. Happy to be here, and it's a real privilege to share this podium with you. I've also been a longtime fan of your output. I think when I discovered you was your authoritative research on FTX and amongst the other bankruptcies that you followed very closely. And to me, it was an incredible sounding board to confirm the way I was seeing the world. There were other people like you also corroborating on it. So funny to think all of these years later, now we're here in a couple steps. We
we we we we we was fun riding on the way down and getting back on the way up. So I'm sharing Jeff's just linked on screen here. So he was Stanford, then Morgan Stanley Derivatives Trader, Senior Associate Harvard Management Company, which is the company responsible for managing Harvard's endowment. We'll talk about their performance. Corbin Capital Partner, Bitwise. So Jeff is a slacker. He's, like, one of the takeaways from all this here. Let's start with Harvard Management Company. Do you wanna introduce Harvard Management, who they are, what that experience is? And let's talk about why thei
Yeah. Happy to do that. And it's timely because Bloomberg actually released a story not so long ago, lamenting on Harvard's lackluster performance for the last decade plus. And it was actually a really good story. I thought it was well researched by the journalist in all the ways that endowment models can look different across the board in the United States. And a few exceptional circumstances, I think, relevant for Harvard's trajectory, since. So let me kick it off by introducing HMC. HMC, Ram, as you said, is the Harvard management company. It's the entity that manages the Harvard endowment,
So liquid strategies only?
Yes. Yes. So we had a variety of PMs. They were hired from the buy side, sometimes the sell side, and they would trade equities, emerging market equities, rates, FX, credit. I was on the credit team where we looked at investment grade and high yield credit as well as different asset backed securities. And vision was, if you could actually hire talented people to manage money for you in a capital efficient way, why should you actually pay 2 n 20 if you're the world's largest endowment anyway? And when I joined Harvard, it was a huge organization actually. There was 200 plus people, and more tha
a great job with their endowment. That's Yes. Yeah. And they all picked the hot hand. Right? Harvard did a fantastic job in the odds. And in the tens, they blew it. It's it's it's a hot hand phenomenon, which you see quite often. Right? People pour money into whichever Petro manager or strategies work best in the rearview mirror, and that's also when it tends to lag. But in this case, it looks like it was it execution issues around this multi manager model or it just didn't work out? Or what went wrong with the strategy? Yeah.
I would say at a high level, there were a few things that ultimately were unfortunate. One is that you have to really be long term minded in i
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