Guest: Mark Yusko. Mark is the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management. Prior to forming Morgan Creek, he was President, Chief Investment Officer and Founder of UNC Management Company, the Endowment investment office for the University of North Carolina at Chapel Hill, from 1998 to 2004. Until 1998, Mark was the Senior Investment Director for the University of Notre Dame Investment Office where he joined as the Assistant Investment Officer in October of 1993.
Date Recorded: 11/29/16
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
Topics: Episode 31 starts with some background information on Mark Yusko. After some early-career twists, he got his “big break” – working for his alma mater, Notre Dame, in its endowment department. Several years later, The University of North Carolina came calling, and Mark took the helm for UNC’s investments. Eventually, he moved on to private wealth with his current group, Morgan Creek.
Given the heavy institutional background, Meb asks about how endowments invest. Mark Yusko tells us that every large pool of capital manages its money the same way – investing in stocks, bonds, currencies, and commodities. That’s it – though how you own those assets might change. Yet despite different wrappings, they all have the same risk factors. This leads Mark to focus on asset allocation, as “asset allocation matters most.”
The conversation turns toward money managers (Mark uses various money managers at Morgan Creek). Meb asks how a retail investor can get access to the truly great money managers. It turns out, it’s very difficult. But Mark says you don’t necessarily want the well-known superstars who’ve been in the limelight for 20 years. You want to get onboard with them far earlier in their careers when no one is looking, before they become famous. As to how you actually find them, Mark says you have to “kiss a lot of frogs.”
Meb follows up with an interesting question – forget about how to find great money managers…how do you know when it’s time to get rid of one? After all, it can be hard to tell when a manager’s investing system is flawed versus
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Links from the Episode:
Save FairUS Q3 MCCM Quarterly Letter
The Value of Value Q2 2016 Market Review & Outlook
Two Thousand Zero Zero, Party Over, Oops, Out of Time… Q1 2016 Market Review & Outlook
Meb: San Juan Hut System
By Meb Faber, read the full transcript here.