Earnest Sweat 00:00
Welcome to swimming with allocators.

Alexa Binns 00:04
The VC podcast from the LP perspective, with your host, Alexa bins and earnest, you ready? Let’s dive in. A big welcome to our guest, Sarah Samuel is a partner at any PC. Sarah oversees 400 clients, and allocates over 1.7 trillion across venture growth equity buyout real estate, energy, hedge funds, public equities and fixed income. She’s been recognized as one of the most influential women in investment management for 2024 by institutional investors, and as an influential woman in institutional investing by pensions and investments for 2023 we’re so thrilled to have you. Thank you, Sarah,

Sarah Samuels 00:45
Thank you so much. It’s a pleasure to be here.

Alexa Binns 00:50
We got a little bit of background on what inspired you from your first job as an assistant to start crawling up the ranks. Can you start by sharing your journey to NEPC

Sarah Samuels 01:03
Absolutely. So I joined NEPC as a partner about six years ago now, and before that, I, as I, you know, mentioned, started as an administrative assistant at Wellington, fell in love with the industry and became a client facing analyst, working with all sorts of institutional clients. I knew I wanted to manage money myself, so I went to an RIA with a quant shop, you know, background with a quant model, and I learned how to trade. I learned how to build portfolios. I learned how to build quant models. It was too short term focus for me, so I moved on to the LP seat, and I spent six years at Mass Prim, which is the large state pension fund here in Massachusetts, ending as deputy CIO overseeing all the investments. And then I moved on to Wellesley College. I wanted to sort of work with a smaller pool of capital and have a more venture heavy program to work with. So during my time at Mass Prim, I was a client of many PCs for six years. And I like to say you should read into the fact that I came over here. I knew the firm really well. They asked me if I thought about joining and taking a fresh look at our investment approach and here we are today.

Earnest Sweat 02:12
That’s awesome in our prep call, you mentioned just kind of that spark and what led you to go on this journey, could you share that with our audience and like, what was the initial spark?

Sarah Samuels 02:26
Absolutely, so I had no idea this industry existed. It wasn’t on my radar. I was studying abroad in Austria. My senior year, I was a German major. I got home in June of my senior year, having graduated, had never had an internship, never done anything besides wait tables. And so I looked on, indeed, or whatever it was, monster.com at the time, and I said, Now this looks like there are a lot of jobs in finance. Maybe this would be fun. I didn’t know how much I fell in love with it, but it was from the admin seat. I didn’t have a ton of opportunities to actually get my hands dirty. I loved how the macro tied to the numbers. I loved how the emissions of these organizations were very applicable and relatable for me. For example, that one organization, the corporate pension fund that my dad was in, was one of our clients, and I got to work on that performance report, so I very quickly saw how important this, this ecosystem, is to everybody really out there, when you think about it. So I asked for stretch projects. I had a pretty major aha moment when I saw a partner at Wellington who was young, and she was commanding the room. She picked health care stocks, and I said, Who is this person? And they said, Well, that’s Jean Hines, and she started as an admin. And then I said, Wow, I didn’t think I could possibly do something more than what I’m doing now, because no one else in my tribe has done that, and I believe we’re track driven people. And she didn’t know it, but she became part of my tribe. And so I got my CFA, I got my Kaya and I went back to grad school for an MBA and asked for stretch projects, and it worked.

Earnest Sweat 04:09
Wow, that’s super inspiring, and it just shows proof of a couple things, one, how seeing can help to believe, right? You saw another woman commanding, and then, just so happened, she had the same kind of foundational background as yours, as inspired, and then also connecting kind of past tribe, the new tribe, I’m assuming, right, like so in your story, talking about the pension fund, one of my kind of like reasons and connecting like an interest and venture, of all the things I love analyzing. I love meeting with companies, but seeing that such a strong amount of the capital going to support this asset class is coming from people like that. Fit like my parents, who were state workers and state employees, that’s powerful and just makes you want to drive even more to do well,

Sarah Samuels 05:08
That’s right. And I think that this point is very easily lost when we’re thinking about what our industry is, we get really wrapped up in creating returns. And is there dpi, and all of these matters. And at the end of the day, what we do is really, really critical to making the world go around. And so I do like to whenever it can, in any situation, whether it’s a speaking engagement or meeting with GPS and LPs, to remind people of the purpose of our capital. So to your point, it helps retirees live comfortably. So my dad was in a corporate pension. My mom was in the state pension system, which I actually ended up managing from my mom. And I was like, Where, rest assured, your portfolio is in great shape. You know, I went to this pool of capital to send first generation kids to college. So I went to the University of New Hampshire with a lot of help from the endowment supporting my tuition. They are helping hospital systems care for the sick, and they’re funding innovation, as probably we’re going to talk about today. So this is, this is really, really important to remember that without this capital and good stewards of it, we’d be in a world of hurt.

Alexa Binns 06:19
And I love your anecdote too, that you were able to sort of get to know any PC based on having been a client. Were there any other lessons learned from the time at Mass prim that inform your private market strategy or your venture strategy in particular? Oh,

Sarah Samuels 06:41
That’s such a good question. So interestingly, a public pension and an endowment, you might not think that they have much in common, but they’re both really, really return seeking, and so they’re they’re both putting on meaningful amounts of risk. There are some major differences. There’s size, there’s check size, there’s governance and all of that, but at the end of the day, the return expectation is somewhere around seven and a half 8% nominal. And we need private markets to get there. We can’t get there with public markets alone. So private markets are really important for both of those but I got some really, really good advice from my friend Kim Lu, who has been a CIO for a long time at different organizations. She’s kind of legendary in our industry. And she gave me this advice about 15 years ago, and she said the place where 99 out of 100 investors, GPS and LPS alike, where they fall flat, is being able to articulate their investment philosophy. And she said, this isn’t during my time at the pension fund, and I hadn’t quite nailed it down yet. I was still learning. And she said, You could be the smartest person in the room, but if you can articulate your investment philosophy succinctly and clearly and in a thoughtful way, you’re not going to go very far. And so I took that to heart, and I spent a long time figuring out what it is that I believe in. And so when I bring this up a lot to people today and sort of challenge them to articulate their investment philosophy, and she was exactly right, they go down rabbit holes. They go on for five minutes. They can’t really, you know, remember the point they were trying to make. So I’ll just give you an example, or I’ll lead by example and share my investment, my overall investment philosophy. Yes, please do you and this through the public and public patch you fund and an endowment, and any other return seeking type of LP. So my investment philosophy is four things. It is. I believe in having an equity bias. It’s the first, the second is paired with thoughtful portfolio construction and diversifier. So if a portfolio is a perennial garden in any given season, we want something to be in bloom. The third is that I believe in locking up our capital in private markets when we’re getting paid for it. We need to prove ourselves we’re getting paid for it. And then the fourth thing I believe in is really, really strong manager selection and partnerships with GPS. So those are the four things I believe in. And then I have sort of different philosophies by different strategy types. So that was a huge learning from my time at the public pension and today. And

Alexa Binns 09:25
Are there any examples of sort of where that came from, like the importance of manager selection? I know Wellesley is fantastic at this. Any stories you can share on where you kind of learn that lesson, or why it’s become part of your philosophy.

Sarah Samuels 09:41
So I’m a big believer in frameworks, and I basically have a framework for any decision that I need to make, because I’ve done a lot of brain work and investment bias and investment bias, I don’t think there’s much more out there that’s more ripe for potential bias than investing. We still have caveman brains actually. Our DNA hasn’t evolved, it takes about a million years, so the way that we often react to issues and challenges is emotional. It’s our first reaction, and that’s going to help us. If we have a saber tooth tiger coming at us or a pterodactyl flying through our window, it makes for terrible investment decisions. So these frameworks help to slow things down, and that’s why I have so many frameworks so that we can be consistent and not be whipped by emotions. So my framework for having an equity bias is that in most economic regimes, growth and inflation over time, we have been in a growth environment about 60% of the time. Inequities are the best investment to be in in a growth environment, and then the rest of the time there. There are some other periods when equity does well as well. And so when we want to match our portfolio construction with when things are going to do best, that’s sort of the framework there, the locking up of capital. This is really a CIO mindset. So it takes a long time to build a CIO mindset and to be able to think across asset classes and think cross sectionally about opportunity costs and where do we want to put our capital. But we need tools to make sure that we’re getting paid to lock it up. Because as a CIO, if I’m going to invest in venture capital, and I could get the same return and the same exposure in a more liquid in a cheaper way, I’m going to do the more liquid and cheap way every time like the bar needs to be high. So these are anything from Public Market equivalents to understanding the different value creation waivers. So that’s the locking up of capital getting paid for, then manager selection. The framework is that we look at the distribution of outcomes within a universe in the public markets. It’s going to be like a 234 percent difference between the best and the worst managers and adventure, it’s 50% so manager selection matters a lot. You could really crush it, or you can really get hurt. I

Earnest Sweat 11:50
I love this. This is like a master class for all of our emerging allocators who are in our audience as well. So thank you for sharing that I love also, it’s kind of like the expectations you put on the fund managers. Like, we always hear, what’s your differentiation, What’s your philosophy, what’s an earnest deal, what’s an Alexa deal, right? And being clear about that, but hearing it from like, we have expectations of ourselves as well. And we’re not just following what every other endowment does, or every other foundation or pension plan does. That speaks volumes. When the question I have though, with all the frameworks, there’s a risk of becoming stale, right? And so where there’s a letter of the law, I’m sorry, I’m a pastor’s kid, so there’s a letter of a law, and then you have to balance it with, like, actually, what’s the actual spirit of the law? How do you, like, Do you have a framework for making sure you do that?

Sarah Samuels 12:53
Yes, absolutely. So the first thing is, we don’t rely on reversion to mean, anywhere in our frameworks. And that’s a huge, huge issue when you have any framework that relies on something reverting, because the world is always changing. Yeah, and you can’t say that like this is the right multiple, because that’s where it was 15 years ago. So we need to be more flexible and think about what’s changed in our world. And then the other is that we have an investment framework to select managers. Shocker, it’s upwards of 400 questions, which sounds really daunting, but it’s, it’s, it has a lot of benefits, including memorializing our decisions and why we made them so there’s no revision of history in the future. It includes deciding what is important to us in a cold state, as opposed to a hot annotated state, unpacking signals from noise gives transparency across the team so that we can challenge one another and have more robust discussions. But there are five broad categories, and four of them would not seem that unique or interesting to you. There are going to be things like people and firm and performance and things like that. The largest weight in our model is something we call the analyst opinion, and this is where I want people to be able to reflect. To number one, toggle this the rating that we have of a manager, depending on their sentiment. And number two, have a place for things that can’t be captured in a model. So this could be your spidey sense, like, if something just feels really, really off, and you can’t fit it into these questions, into the letter of the law, but you know, the spirit of the experience was not good. You can express that there. Or if you want to take a flier, if you want to say, Hey, I can’t like the point directly to specific deal level attribution or track record, or anything like that. But I believe in this person, because I’ve used the mosaic approach and the way that they’ve done things really works for me. Then we can have a sort of positive sentiment, move her in the other direction, and it’s a life. And breeding things. So we do adjust it over time

Alexa Binns 15:02
is that, and it ends up basically being as opposed to reversion to the mean. If the analyst is is really has a sort of icky or uncomfortable feeling, you know, there’s some, some people are really peeved by name dropping, or, you know, they always use the term I, instead of we, some of these things would, would potentially, then just knock a manager out of consideration. How sensitive is that model where, you know, it’s like, actually, I don’t think we want to, we can’t. And got a recommendation for this, this human to our clients versus like, Oh, they’re doing it on paper, they’re really great, but there’s just something we’re not, we’re not on the same page with like the personality is, is a little rough, yeah.

Sarah Samuels 15:52
So we, I think the first thing is to remember that there nobody’s making any decisions in a vacuum. So this is definitely a team based approach, only three stages of your underwriting process, and the team is going to be pretty, you know, they basically kind of need to agree, so nobody’s going to be kicking our manager because of personality. Sometimes the most charming and, you know, charismatic managers may not be the best at creating value, and vice versa. And then it, it’s not the type. It doesn’t have a big enough weight that it can drastically change the outcome, but it will toggle it, yep, yeah,

Alexa Binns 16:31
we’ve had Alex Edelman, who’s got a fund of funds on who was like, I like the weirdos. You know, everybody’s got sort of a preference for different personality types.

Sarah Samuels 16:39
That’s actually my module in life, like I love you, but the types of things that we are asking about in our framework and in our model, you know, I won’t go through all of them, of course, but we’re asking managers about their investment edge and if it’s sustainable. So an investment edge is sort of similar to an investment philosophy, except I think an edge necessarily is a little bit more fleeting, like it can be arbitraged away. If it exists, there’s a lot of capital, a lot of smart people. So when will it stop working? We want to make sure they’re thinking that way. You know, we ask about succession. This is like a whole different podcast. In fact, I did do a podcast on succession capital allocators this summer. So this isn’t just about VC founders stepping down, because obviously an emerging manager in their 40s, we’re not going to hope to ask them to have a succession plan. But it’s also about that next generation and retaining them at the GP so that they are motivated and they’ve learned to grow. It’s about scaling properly, so that if you are growing funds, two, three and four, that you’re not just handling more and more work yourself as the founder, someone else who can we’ve trained. And then it’s also about replacing founders at portfolio companies. Because, you know, research shows that about half of founders are replaced by the time their company reaches the third round of financing, and about three quarters are replaced by the time a company is successful enough to go public. My coach, Sloan climb always tells me what got you here won’t fit you there. So there is often a lot of sort of succession work that needs to be done.

Earnest Sweat 18:09
Now, we’re going to take a quick break to speak with our sponsor on

Alexa Binns 18:14
the show today. We have a friend and industry expert Nick Talwar, a factional CTO for both VCs and their port codes. His agency, bottega trains, custom AI models for financial institutions like yours, welcome, Nick. Many of the folks listening are VCs. They’re fundraising or operationalizing and institutionalizing their firms. How do you help VC funds?

Nick Talwar 18:40
There are three main ways we help VC phones. We help them operationalize their fun pieces with AI. That’s number one, everything from thought leadership content creation using AI and distribution AI pipelines to pitch analysis and then through our fractional CT work. That’s the second sort of way we help PCs. That’s really about the port codes. We help port codes navigate tough transitions, act as a resource to help port co exec pivot and drive efficiencies with AI. Or we use AI first methods to explore new green field options for the company to meet the next set of market demands or meet their next fundraising milestone. And a lot of companies are struggling in this AI landscape. And I think it’s really important for us to just have an open conversation as much as we can about that, that it’s okay, you know, it’s okay everyone’s dealing with this, like everyone’s dealing with this weird freight train bearing down on us. So let’s just kind of roll up our sleeves and work together with you and we basically have some great results of turning companies around and making sure that they become profitable, or they have the right technology stack and product design, like platform product design for the next set of ai opportunities.

Alexa Binns 19:59
Yeah. No, that makes a lot of sense, that once you’ve made your bets, you need to really help those individuals for work clothes be successful. And this is a massive This is a massive opportunity to become more capex efficient, etc. Where, when capital is on short supply, you need Nick

Nick Talwar 20:21
That’s a great tagline. I should steal it. We caught one that was in short supply called mint.

Alexa Binns 20:26
Exactly, can you share any funds that you’re working with today?

Nick Talwar 20:32
Short answer is no. Pretty much, all the work we do is highly sensitive and competitive. Unfortunately, for example, oftentimes we are hired by and deployed by the board of a port CO for various reasons. And so I can’t really answer that, but you know, on a one to one chat, maybe we can. I can elaborate further, of course,

Alexa Binns 20:50
no, of course. I think we all know we should be implementing AI into our firms. But where do you see the most impact? Where should VCs be focusing

Nick Talwar 21:02
operations? Like we all know that many VC firms could benefit from more organization, some focused process, and just a little even, and it’s always been hard to do because of the lack of a product or engineering team. AI can fast track you in big ways right. In the past, we would have to build an entire technical architecture to get an output or a business outcome. Now, AI kind of flips the script a little bit, and you can use AI first and then curate and design certain ways in which you can collate resources and train it or provide the right context such that it can actually supercharge your operational workflows and save you a lot of time. Yeah, but only that, but bring breath, because the because, you know, LLMs are trained on the, on more, like all of the information ever created on the internet. So, it can today. You know, in short, it can help you with automations and augmented workflows, and that will help you drive better decisions. Yeah. And

Sarah Samuels 22:04
there’s sort of

Alexa Binns 22:06
each of us is receiving in our inbox pitches from individuals as companies, sort of helping to help, helping with a piece of

22:13
this. What? What’s the pitch for? Sort of working with

Alexa Binns 22:19
folks like you, rather than maybe dabbling with some of these individual solutions on, you know, better diligence or better, you know, cron,

Nick Talwar 22:32
Well, I think it’s because we’ve sat on every side of the proverbial table. You know, I’ve been a founder and CEO, started the companies, and then I’ve also been working with VCs, and we’ve been around for like, 12 plus years doing this work, so we actually have that longitudinal context and history to kind of help you and or your port codes. And so we and, and frankly, a lot of like, you know, of you folks are kind of our friends. We have been friends over the years, so we understand your problems you’re going to go through really, really well and and we don’t have that sort of, like, surface level, you know, shit post marketing view of VCs. We just don’t share that. Like, that’s like, not how the world works. And it’s like, much. It’s very difficult. It’s very hard. It’s like, you know, the founder’s journey sometimes times five, right? As a solo fund operator, or someone who’s trying to create a new VC fund, or who has done it in the past. So, yeah, we just do our best to roll up our sleeves with you. Yeah? Well,

Alexa Binns 23:40
I am very sympathetic to you.

23:43
I wouldn’t, I don’t. I

Alexa Binns 23:44
I don’t feel so bad for the ECS, but we are having a tougher time.

last question on this topic, would

24:31
you give

Alexa Binns 24:32
us some tangible examples, whether it’s implementing AI for sourcing or tracking or you were talking about, you know, look through deck.

Nick Talwar 24:43
Yeah, so that’s a good question. They’re about here’s, here’s something like our small handful this matter, you talked about sourcing. AI can analyze, like, massive data sources and like emerging companies, trends. It’s really, really good at that. Like, yeah, particularly, like summarizing. Sentiment and shifts automatically. And you can’t use some real time sources for AI augmenting prior train models, like, you know, chat GPT is trained on X months in the past, right when you use a one preview or for like, and so you need to augment that. And using and building a simple technology stack that can do that for you is really, really powerful for forcing deals that can scan, use patents, you know, funding data and suggest startups. Or it’s like an augmented sort of radar, yeah. The second is, like, you know, due diligence. Like, everyone wants to do better due diligence. And it’s really, really hard. And we talked about the top of our, of our, of our chat here, that it’s really hard to kind of suss out the pretenders from the actual and experts. So you can do diligent support and models consist of financials, technical documents, even, you know, give you, give you a snapshot of risks, strengths and patterns of time. And so I especially if you have a very core thesis in an industry that’s really, really important. You don’t want to dilute that thesis when you, you know, talk to the next charismatic founder type, right? So you want to make sure you keep yourself and them honest. Portfolio tracking and benchmarking. Build a simple AI driven dash for and then that’ll help inform your LPS better. Build that relationship. Like investor and LP reporting is also really important. So those are kind of like, you know, three or four use cases that AI can help you with. Almost every single one of them requires some custom customization. I mean, you can’t just, like, open up chat GPT and ask it a question, and so we use, like, agentic frameworks and things like that to put those together for you. And yeah, that’s what, that’s what we think could work well, yeah,

Alexa Binns 26:54
no, I think that customization is a big part of what we talk about on this show in terms of differentiation. Because in many ways, GPS, you know, we take money from one hand and we pass it into the other. And so having, having custom tech is is sort of a no brainer now, and how to differentiate yourself in the market, yeah,

Nick Talwar 27:14
and on that point of differentiation in the market, like, your brand is super important. AI can, like, supercharge, it’s like a thought partner, and you can help with content distribution. Like all basically the best content distribution strategies today are multi-channel, and that’s really, really hard to do on your own right, like you might write a great blog post or prospectus and want to chop it up into a Twitter thread, then also put it on LinkedIn, and it’s a slightly different format. And then if you’re if you’re really spicy, you might want to create some TikTok dances with those things, or, or, or put up a YouTube channel, and maybe it’s like a faceless YouTube channel or a conversation your podcast, and chop up your like those are all multi channel strategies, and they actually reinforce each other. So because all the algorithms on these big companies are actually listening to each other, if something pops off on TikTok like it’s more likely to be pushed on reels or on YouTube, because they’re constantly changing. So I always recommend a multi channel strategy if you can, if you can execute on it, and AI is that is your partner to help you chop things up and move things forward and curate things as you go.

Thank you so much. Nick, if you are looking for help implementing AI at your fund or across your portfolio, you can please go to Bottega8.com, backslash swimming.

29:43
That’s B, O, T, T, E, G, A, eight, as

Alexa Binns 29:48
in the number.com backslash swimming. We appreciate you giving this the credit. So please use the URL. And now back to our LP interview. You

Earnest Sweat 29:57
I know I want to jump into it. To any PC soon, but before, because we’ve been talking about kind of like, how you all think about fund managers. I’m curious, over this last bull run, I want to ask, Will you do this? There’s, it was a different market, right? And not only for founders, but for fund managers and seeing how funds were deploying, how fast? What do you think are some qualities, both of you, what that we’re missing, that we need now in in fund managers,

30:32
your honor.

30:36
Alexa, do

Alexa Binns 30:39
Do you want to go? I think it’s a healthy sense of competition, actually, that if your marks were all up and to the right, and you were able to close bigger than ever fund, I think everybody started to sort of think of themselves as extra special, and to recognize that that was the market, that wasn’t necessarily your skill or your exceptionality or something. So I think now you have to sort of recognize that you’re one of many, and that’s why the differentiation question becomes much more important. It’s like, why were you seeing those markups? What was the strategy there? And to be able to point back to something that’s actually unique to you,

Sarah Samuels 31:35
I think that’s right. I think, though, the word of the day is discipline. And we did see some GPS that had discipline in 2022 and 21 others have fully admitted that they got sucked into the momentum and the animal spirits, and they described it as being a frog in boiling water. Really, really subtly and slowly. Before they knew it, they couldn’t believe what they were paying. But to the point of, you know anyone under the age of 30, I mean, 30 678, hasn’t lived through a market like a slow market crisis. We’ve had some blips here and there, but that is actually a huge disservice to these people, because there’s this concept of stress wood, right? That trees without stress grow really fast and high, but they’re super flimsy. They’re going to get blown over and die sooner because they don’t have the stress of trees that have things thrown at them, hurled wind, you know, all sorts of material and debris. They’re going to grow slower, but they’re going to be much more sustainable and stronger. And so I think that what we lack today is stress and we’re certainly not going to get there by experiencing it alone. We need, actually, mentors. We need the people of venture cycles, elbow to elbow with these younger GPS and LPs and investment committees for that matter, saying, Hey, here’s how it’s going to play. Here’s how it’s going to feel. Here’s why I’m saying that we shouldn’t be making this deal today, even though I know you’re young and hungry and I know you want to get paid, and I know your ego wants to say, like, I put this many dollars to work, and this is my deal. This may not be the time. So it’s really interesting. We went into this one GP in the fall of 22 and we’re supposed to meet with a senior person, and we ended up meeting with a more junior person who wasn’t trained in how to speak with us. To speak with us, and they opened the kimono, and they just started talking about, you know, the sort of relative dysfunction in the organization, because they weren’t doing deals like, people are angry. They’re so but that organization, in hindsight, was exactly spot on, but they needed really good leadership along the way to bring those people along. The other story is that we’ve gone into so we have to remember that that you know, underlying all of these investments is a public market. Yes, we’re drivers, right? And when you show up in a risky enterprise, you should be paid something for it. And so the idea that everything, all value that’s created, is because of one’s golden touch or alpha? It’s a pervasive idea, and it’s not common that we see GPs who said, here’s what we delivered, over and above what the marketing did.

Earnest Sweat 34:14
I’m so glad I asked that question, because those are some gems from both of you, and I just finished this book venture mindset, which is essentially two Stanford professors talking about how to provide or how to execute the venture perspective in the corporate environment. And they speak about, like, you know, the history of redwoods and sequoias and how, like, there’s a lot of fires, and they grow slowly, right? And so, yeah, that just, that just sticks with me. I think that’s that’s so important,

Alexa Binns 34:51
the number of VC funds that have tree names, yeah,

Earnest Sweat 34:54
I’m not gonna say what she inspired me for. Think about it, I do have a fund. That I’m trying to think about a name so, but I’m not gonna share it right

Alexa Binns 35:03
now. I wanted to learn more about mentorship, sort of, what advice do you have? Things that you’ve seen work for you. You’ve talked about how Jean Hines was this, you know, sort of, you were able to hold her on a pedestal, but she also was willing to give you some actual tips and feedback.

35:23
What’s, what are

Alexa Binns 35:25
some things that younger folks in their career can do to, you know, manage up in terms of mentorship, or things that you’ve seen work really well for people that you’ve been helping along through their careers?

Sarah Samuels 35:36
Yeah, such an important question. And you know, my philosophy on this topic is that I don’t get to keep what I have unless I give it away. And that means any, any wisdom. And it also means my, my, you know, material things. So I want to die with nothing. So it’s pretty easy to give away what you have and meet with people. And you know, there are a number of ways to do that. So one is to get involved in an organization you believe in, whether it’s at your company or somewhere else. So that we have an actual mentorship program at any PC where we meet with somebody new each month, and then, if it’s a good fit, it sticks. We have dei board, of which I’m a member. I’ve been involved with girls who invest since the beginning. I’m a founder of PE win in Boston, involved with big PE win, and I wrote a children’s book to for to lift up that those kids from underrepresented communities and try to make a dent in this 2% of capital was managed by women and people of color by giving to kids education and role models. But then, you know, it’s, it’s really, if you, if you want to make it a business decision, which it can be, you could look at this from a business perspective, it’s absolutely good for the bottom line to share what you know and share what you have and to bring others up, and it makes your life a lot easier, too, if you’re surrounded by people who are capable and happy and competent

Earnest Sweat 37:09
to that and well, first of all, you’re doing, you’re you’re doing a lot, and thank you for all that you’re doing in the communities and in the industry we’ve had over these last seven years more of a focus on the lack of diversity within our industry. But hopefully we continue to progress. But you know, there have been headlines on what’s been pretty evident, what we’re feeling of more zombie funds coming from underrepresented fund managers and female fund manager led funds. What do you think we can learn from that kind of you know, 2018 to 2021, period and what, what’s the responsibility of the industry first

Sarah Samuels 38:03
is, you know if, if you’ve got, if you’ve got your see yourself working, find yourself working with an emerging manager, or a manager that might be smaller in size or newer, to really make sure that you’re partnering with them in A very close way, and not just providing capital. So when I think about my friend Lisa Coley, who is a guest on your show, her firm does this where they help them create sustainable business models, and this doesn’t have to do with gender or race or ethnicity. It just has to do with being a newer fund. And then the other is to just be connected with those in your ecosystem. There’s a lot of people who support one another and do not try to do it alone on any PC. You know we have so we have, like so many different areas of expertise, and we have this scale where we’re putting about half a billion into venture each year, and we problem solve for our clients. And so we have a lot of clients who this is where that idea of using our voice for good at any PC is really important. So I thought I had a big voice at the state pension fund with $100 billion in assets. Now I really feel like we have a big voice in the ecosystem, 1.7 trillion. There’s a big responsibility that comes with that, right? So our voice and our recommendations matter, and sometimes I disturb people when I ask them the questions, but I ask them, fine with that, and I tell my team members, I want you to ask these questions about this organization. And this is more along the lines of lack of diversity at bigger or medium sized organizations. There are a series of questions that I’ve given each member of my team and I want them to ask. And I say, if you’re uncomfortable asking this because of power dynamics or younger, just tell them I want to know so they leave. They give them that reason often, but we really want to use this voice to lift that to help our industry end up where we want. Eight, right? So we want more diverse ownership. We want more diverse funds. We want this to really match the world in which we live, and there’s no reason that it shouldn’t. So that was another point I wanted to make. We have a specific rating platform that’s dedicated to diverse strategies. We bring them through all the time through our regular platform as well, but this is called our Explorer rating platform and and this is so that we are very deliberate, and it’s not a sort of side gig, or if we remember, we’re very deliberate of set goals for ourselves about bringing through a certain number of funds that are diverse, owned or LED. And that’s been really well received. The clients that are making the most changes in their actual investment portfolio to reflect their beliefs about how the world should be our community foundations, they’re the ones to say, This is what our underlying community looks like. So we have, you know, one, one client example, where you know, they serve a community that’s half black and then half white, and they want their portfolio to reflect that. So we think of helping them move the needle and begin to reshape their portfolio. And that’s just one example. So I feel good about what we’ve done, and we also have something. I’ve chaired the CFA Boston Society last year, and one thing that the CFA Institute rolled out, and I know this isn’t really a venture heavy community, but CFA Institute is pretty powerful, and they rolled out a dei code where managers can and GPS can sign on to commit to make progress. It’s pretty low hanging fruit. They meet you where you are. All you have to do is demonstrate progress from one year to the next. You don’t need to have, like, a certain percentage. It just needs to get better. So I’m a big fan of that. And I sent out a note to all 2000 of our GPS in our database, and said, Please sign on to this. And they saw a threefold increase in the number of signatories in about a month. So, you know, there’s, there’s a lot that we can do

Alexa Binns 42:07
Now that’s exciting to hear that among the CPA community, as well as the Community Foundation’s momentum exists, because it does feel like the air has gone out of the room a little bit. But there’s, there’s these pockets, these pockets of movement. Can you tell us a little bit about braving our savings so that people can purchase for their Christmas stocking stuffers?

Earnest Sweat 42:34
Yeah.

Sarah Samuels 42:35
Thank you so much for asking about it. So you know, I mentioned that the real game changers for me were role models in education, and the purpose of writing this book was to really perpetuate that and scale that I think about Brainer savings and the movement around it, which I call 30 seconds of bravery. 30 seconds of bravery is the idea that if you do something that’s scary, if we all did for just 30 seconds, it will absolutely change your life. And it happens for me about six times that I can think of really, really scary things that totally altered the trajectory of my life. And I think about this little like, you know, idea of mine is like a bit of an entrepreneurial venture, like a nonprofit entrepreneurial venture. So created this from scratch, read the book, got it published, and the book has had a lot of strong support and endorsements from the investment community and nonprofits and pro sports players like Alex Rodriguez and some patriots players. So we’ve given away a bunch of copies. It’s also for sale on Amazon, and there are a few underlying messages that the power of capital is tremendous, which we talked about, that role models in education are super powerful and can lead to a step function that changes one’s livelihood and ability to take care of themselves. I don’t get to keep what I had unless I give it away. So giving it away to underserved communities, and then it’s amplified by others in the industry as well. So the focus is bravery, the story of my girls, it’s actually a true story. I taught them how to invest last year. I’m divorced. I’ve been divorced five years, and I sort of said to myself, if these girls can’t stand on their own teeth, I haven’t done my job properly, and they were six and nine when we did it. So they’re the main characters. And it’s in a sneaky way, written for parents as well, with some technical stuff that matter about how to invest

44:35
what’s a good age group

Alexa Binns 44:37
if grandfathers are listening or with the right audience, yeah,

Sarah Samuels 44:42
I think anyone from four to 10 or 11,

Earnest Sweat 44:49
Okay, that’s it. I have an idea for my son now. Thank you so Sarah, it’s been wonderful having you on Do you have any parting thoughts for you? Know, emerging? Mean allocators or emerging managers out there, absolutely

Sarah Samuels 45:03
Okay, so we’ll start with GPS out there. We ask, you know, you’ll go pretty far if you keep these things in mind, to be honest about challenges in your portfolio. So we don’t want any surprises. Ask LPS how they make decisions and timelines, and remember that we have governing bodies behind us. And oftentimes, the person you speak with may not be the ultimate decision maker. Be flexible with your pitch and ask questions and be curious about the LP you’re speaking with, because that purpose of capital might really be a great connection point. And for LPS, you know, be as transparent as you can with GPS, a quick no is much more valuable than along now and work on that investment philosophy and edge in articulating that post for both of them.

Earnest Sweat 45:48
Thank you. I just feel like I could have gone. We definitely are going to have to have a part two at some point. But you’ve been awesome. Thanks, Sarah, for being on the pot.

Sarah Samuels 45:59
Thank you very much much. Thanks. See

Alexa Binns 46:01
you later. Allocator,

Earnest Sweat 46:04
after portfolio tile, investing with a smile.