My guest today is Scott Malpass. Scott was the CIO of Notre Dame's endowment for 32 years and has always been a pioneer at the forefront of the endowment investing world - leading Notre Dame's early investments into Sequoia as well as some of the premier fund managers in China decades ago. Scott built the endowment into a powerhouse, scaling it from $400 million to over $12 billion of assets under management across 175 managers. In our conversation, we talk about the qualities he looks for in great investors, how asset classes have evolved over his 30 years of investing, and how Scott recruited top talent to work at Notre Dame’s endowment. Scott is clearly on the Mt. Rushmore of institutional investors, and I’m lucky to consider him a mentor and a friend. I hope you enjoy this great conversation with Scott Malpass.
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[00:03:54] - [First question] - Finding his way to investing and Notre Dame
[00:06:11] - Key milestones of running their endowment for so long
[00:07:58] - What an endowment model is and how it’s evolved
[00:10:30] - The ingredients that unite their shared successes
[00:11:46] - His philosophy on building a differentiated investing team
[00:13:11] - How he approached talent identification when hiring new managers
[00:15:39] - The importance of understanding who someone was before they became an investor
[00:17:12] - Episode: Steve Mandel, Investing Behind Change
[00:17:28] - Whether or not someone has a reliable and solid core
[00:19:03] - Differentiating between self-confidence and an over-inflated ego
[00:20:27] - Evaluating real investing skills in an individual
[00:21:44] - The most memorable major early partner he brought on to the endowment
[00:23:14] - What made Don Valentine and Sequoia so special
[00:24:21] - Forcing good long-term incentive alignment with a firm
[00:26:35] - What makes a GP exceptional in how they treat LPs
[00:28:01] - How many managers actually have the ability to create alpha
[00:29:24] - His thoughts on venture capital and how he’s seen it evolve
[00:32:40] - The role private equity played in his success and how it’s changed over the years
[00:34:36] - Why diversify when managing such a large pool of capital
[00:35:58] - Public equity as an area of opportunity relative to private and venture capital
[00:38:08] - Bonds in an endowment and high net worth family offices
[00:39:32] - Whether or not equities are still appealing
[00:40:20] - Lessons from investing in China so early in his career
[00:42:59] - What he’s learned about effective leadership from leading the team at Notre Dame
[00:44:54] - Advice on building your own basic portfolio
[00:47:03] - Portable classroom lessons that lend themselves to effective teaching
[00:48:28] - Why it’s important to do team-building exercises and off-sites
[00:50:07] - His thoughts on cryptocurrency and how others should think about it
[00:51:52] - Students that he’s most proud of across his career
[00:54:56] - Ways you should spend your 20s if you want to become a great investor
[00:55:49] - What’s on the horizon for him over the coming years
[00:57:55] - The kindest thing anyone has ever done for him