Bruce MacDonald – The Playbook for Building a Mid-Sized Endowment from Scratch

**Bruce MacDonald** (0:00)
When there's just five of you, you can't do everything. You have to make a choice about things to leave out. Because you're leaving out a lot, you really have to be focused on picking the right things to lean into. Our portfolio probably looks a little bit different in that there's a lot of things that we've decided to not spend our time on, because we believed we'd be better spent spending time elsewhere. Things like private credit, China, Latin America, Africa, we decided to keep focused on other areas of opportunity. Market timing is a mugs game. As one of my old bosses said, endowments have an unfair advantage in that we work with the smartest investors out there. It's not necessarily market timing when your expert in emerging market internet companies comes to you and says, my companies have never been cheaper. We are seeing opportunities we have never seen before. That to me is backing good investments. Historically, endowments have done a great job of that, but in the last 10 or 15 years with the obsession of private assets, that tool has been taken out of the toolkit. We pride ourselves in keeping that tool in the toolkit. We have abundant liquidity to stay in, step into dislocations either at the manager level or at the market level.

**Ted Seides** (1:22)
I'm Ted Seides, and this is Capital Allocators.
My guest on today's show is Bruce MacDonald, the CEO and CIO of the Virginia Commonwealth University Investment Management Company, which runs $2.5 billion for VCU's Endowment and Health System. Bruce joined the university in 2015, and shortly thereafter had the opportunity to sell the portfolio and start fresh. Since being promoted to CIO in 2022, VCU has been a top decile performer with a team of just five investment professionals. Our conversation covers Bruce's unconventional path from a religion major at Wesleyan, to fixed income investing at Putnam, and endowment roles at Columbia and Uvimco before arriving at VCU. We discussed the principles of VCU's approach, including building a portfolio around secular tailwinds like India, Vietnam, gold, and artificial intelligence, while maintaining abundant liquidity to act countercyclically during market dislocations. We explored VCU's team-based underwriting process, lessons learned from mistakes, and personal influences that shaped Bruce's investment philosophy. Before we get going, it's travel season. Partner meetings, board meetings, the Capital Allocators CIO Summit, Omaha for Berkshire, and Milken. Across planes, trains, and automobiles, you're bound to run into a few snacks. When they're unavoidable, I try to remember Will Gidera's story of the pilot who lifted everyone's spirits by bringing families into the cockpit. But it's not always easy, which leads to my most recent pet peeve. I was on a flight with some unfortunate delays. We were scheduled to land from a cross-country journey at 11:30 p.m., but got diverted from New York to Philadelphia because of weather at just the wrong time. After a gas-and-go stop that took about an hour, we finally landed at 3 a.m. And at that time, there's only a scant crew working at hangars, so we waited another hour on the tarmac. None of that was anyone's fault. But after a long flight, an equally long day, you can imagine everyone was ready to go home. All the passengers queued up to depart one by one in an orderly fashion. It's actually uncanny how respectful people are when getting off planes. But there's a moment when it's your turn to get moving, and on this particular flight, after eight and a half hours, the person in the row in front of me seemed oblivious to the cadence of the queue. When it was his turn, he arose, seemingly clueless, and forced everyone behind him to wait. Of course, this wasn't just a grab your bag and go. Two bags, maybe three, come down from above. Then he pauses to put on his jacket, then reorganizes his bags to put a backpack on top of his wheelbag, and then without as much as I'm sorry, he slowly started walking off the plane. Not a single movement in his de-planing occurred until after the person in front of him had started walking. So there you have it, my new recent pet peeve. Don't be that person who isn't ready to de-board a plane when it's your turn. It's just not that hard. And thank you for spreading the word about my most recent pet peeve, which you'll only hear by tuning in to Capital Allocators. Capital Allocators is brought to you by AlphaSense. Expert calls have always been one of the most powerful ways to build conviction. But today, investors are asked to cover more companies and move faster with leaner teams. With AlphaSense's AI-led expert calls, their Tegus call service team sources experts based on your research criteria and lets the AI interviewer get to work. Then they take it one step further. Your call transcripts flow natively into your AlphaSense experience and become searchable and comparable so your primary insights plug directly into your earnings, diligence and pitch book workflows with no tool switching. AI for coverage and efficiency, humans for complexity and conviction. Sounds like just the right mix to create a scalable institutional edge without growing headcount. For hedge funds, this means validating thesis assumptions before earnings across dozens of experts instead of a handful. For private equity, it means faster pre-IOI scans and deeper commercial diligence. And for asset managers, it means pulling real operator's perspective straight into models without disconnected tools or manual handoffs. All of this lives inside the AlphaSense platform, turning raw conversations into comparable auditable insight. The first to see wins, the rest follow. Learn more at alphasense.com/capital.