The Endowment Playbook: Balancing Long-Term Goals with Current Market Volatility

The Derivative

In this wide-ranging conversation, Jeff Malec sits down with Dave Morehead, CIO of Baylor University's $2.2 billion endowment, to explore the unique challenges and strategies of institutional portfolio management.

The discussion covers Baylor's innovative approach to portfolio construction, including their successful deployment of volatility strategies during the 2020 market crash, their current cautious stance on equity exposure, and their philosophy on private investments. Morehead explains why they're shifting away from cyclical assets in private markets and focusing on secular growth trends in healthcare, technology, and consumer sectors.

Particularly timely is their analysis of recent market volatility, bond market dynamics, and the broader implications of trade policies on institutional investment strategies. The conversation provides a rare glimpse into how a major university endowment navigates market uncertainty while maintaining its core mission of supporting education and student scholarships.

Whether you're an institutional investor, family office manager, or investment professional, this episode offers valuable perspectives on long-term portfolio management and the evolving landscape of institutional investing. Learn how one of the industry's thoughtful practitioners approaches risk and return in today's complex markets.

You want to learn how institutional portfolios really work? You want to understand how endowments think about risk? You want to hear from someone who's traded it all and now manages billions? SEND IT!

Chapters:

00:00-00:55 = Intro

00:56-09:33 = Hedge Fund Executive Transitions to Higher Education: Exploring Dave Morehead's Career Pivot09:34-26:18 = Baylor University's Strategic Endowment Investment Philosophy Revealed26:19-36:20 = Beyond the S&P 500: Discovering Unique Investment Opportunities in Helium and Niche Markets36:21-46:30 = Hedging Strategies and Volatility Management: Navigating Market Uncertainty with Strategic Risk Mitigation46:29-53:51 = Trust Issues and Geopolitical Challenges: Overcoming Uncertainty in Modern Investing53:52-01:00:32 = The Long-Term Perspective: Endowment Investing Beyond Quarterly Returns

01:00:33-01:09:39 = An 80s Rock Music Nostalgia Trip: Revisiting the Iconic Sounds of the Decade
Follow along with Dave on LinkedIn and X and also be sure to check out Baylor's endowment for more information!

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