Rebuilding the NYU Endowment – Michelle Knudsen

**Michelle Knudsen** (0:00)
We've walked a little bit of the middle ground between a more traditional asset allocation and a total portfolio approach. At the core of our asset allocation, we've tried to hone in on what are the different types of assets and the different roles that we want our assets to play in the portfolio. We'll put some quick numbers around it. NYU's portfolio today is about $8 billion.
We've turned over a little more than a third of it in the last two years. We've re-underwritten another third of it. There's another piece of it. We're still figuring out what we're going to do longer term. The profile of the portfolio from a return perspective and from a risk perspective is different. We've moved away from this homogenous bottom up fundamental approach to mixing in some quant exposure, some macro on the hedge fund side or RV strategies. We've brought in venture capital. We've brought in emerging managers.
In the two years that I've been at NYU, we've backed a fund one, a new launch hedge fund, a couple fund twos. Started looking at how do we build relationships with not just the current generation of great managers, but also the next generation of great managers.

**Ted Seides** (1:38)
I'm Ted Seides and this is Capital Allocators.
My guest on today's show is Michelle Knudsen, the Chief Investment Officer at NYU, where she oversees the university's $8 billion endowment. Michelle joined NYU two years ago, after 14 years as an allocator at Partners Capital and the Mellon Foundation, with a mandate to build a best-in-class endowment from a clean sheet of paper. Our conversation traces Michelle's lessons learned working at Goldman Sachs, a growing OCIO, and a foundation that shaped her investment philosophy and views on portfolio construction, risk management, and manager selection. We then turn to the transformation of NYU's Investment Office from the ground up, across governance, portfolio strategy, investment process, and the team. Along the way, we discuss manager selection, emerging managers, venture capital, hedge funds, AI, stress tests, and what it takes to build an enduring investment organization.
Before we get going, we're hiring at Capital Allocators. Two roles that will shape our next chapter. They're two of the best jobs in the business, at least in my opinion, that will help us bring together our community of allocators and managers to compound knowledge and relationships. And best of all, we get to serve this community without really selling them anything. The first is investor relations. The role includes both building real relationships with allocators and managers and creating the experiences that bring them together. The relationships come first, knowing who should meet who, what each person is working through, and where the connections lie. The experiences are how you deliver on them, the kind of unreasonable hospitality that makes Will Gidera smile, thinking about how we make someone feel like the only person in the room. It takes off-the-charts EQ and real curiosity about how AI can deepen the way we connect with people. Tamar, our relationship savant, owns the role today, and she'll tell you it's the best seat in the business.
The second is Chief of Staff, a great multitasker who takes small projects and strategic planning off Hank and my plates and helps run our three businesses, with AI at the core of the job. It's the seat Hank stepped into five years ago after a single post across our channels, and today he's our CEO.
The sky is the limit on how the role could evolve. For context, we just hosted our 10th Summit, and we've now brought together 432 allocator organizations and 301 managers who've shared over 125,000 one-on-one contacts. If either sounds like you, email us at hank at capitalallocators.com with your answers to three questions. One, how did you find the podcast? Two, what was your most recent project using AI? Three, how are you connected to someone on our team? Full descriptions of the role are available at capitalallocators.com. Thanks for spreading the word about our two new roles at Capital Allocators. Capital Allocators is brought to you by AlphaSense. Here's something for you. Most AI tools today are very good at sounding right, but can you actually trace it back to a filing transcript or a specific passage that drove the answer? Or are you just trusting the confidence of the output? For allocators, that's not a minor concern. A missed filing, incorrect source, or context that gets lost somewhere in the retrieval chain aren't edge cases. They're how decisions go wrong. AlphaSense is the AI platform built specifically for this. They own the content, over 500 million curated documents, from broker research and expert transcripts, to filings and earnings calls, and they own the retrieval layer on top of it. That means every answer can link back to an exact verifiable source, because the answer is only as good as what's underneath it. And with AlphaSense, you know exactly what that is.