2018 NextGen

“Justin is a terrific guy which makes him not only a great colleague, but also helps him build quick rapport with investment managers. He values multiple perspectives and challenges himself every day to think differently. These qualities position him to be a strong investment professional.”  
— Lauren Meserve, CIO, The Metropolitan Museum of Art 

Early investing conversations with his father put Justin Reed on a lifelong career path, where the fresh prince of the Met cut his teeth as a private bank analyst at JPMorgan. As he climbed the investment ladder, Reed went on to work for his alma mater at Princeton University’s investment company. Five years later, he reached main event status at his current position in New York’s Metropolitan Museum of Art—a place that’s home to many of his fondest memories.

Reed favors challenge over comfortability, and is looking to get into opportunities he sees in Japan, a place he considers often overlooked, as well as emerging and frontier markets. In addition to changing the way investors think about building a portfolio, he’s also hoping to see more diversity in investment firms—particularly more women in the field. He worries about short-term focus in some sectors of the industry and is surprised about investors shying away from some alternative strategies in favor of long-only equity, but at the end of the day, Reed loves his career and has found the perfect way to marry it with one of his favorite pastimes.

Reed: We recently upsized with some managers with whom we have high conviction and those investments have really paid off, and hopefully will continue to do so for years to come.

From a professional development standpoint, I’ve recently been spending a lot of time looking at opportunities in several different asset classes and thinking about portfolio construction. I’m convinced that the process of moving across asset classes, with each opportunity truly competing against another, has made me a better investor and has had the additional benefit of increasing the time I think about the portfolio holistically.


CIO: What would you be most excited to accomplish in the year ahead, and why?

Reed: I hope to do some deep diligence on a couple of areas that excite me. I’ve been really encouraged by what I see happening in Japan, and despite it having one of the most liquid and developed equity markets in the world, there aren’t that many sophisticated managers focused on the country. Inefficiency creates opportunity and that’s partially what excites me. I’m also really eager to continue our manager search efforts within emerging markets.


CIO: What’s the most rewarding aspect of being an asset owner?

Reed: Doing what I love to do while supporting a great institution like the Met. I guess there are really two parts to that comment. First, I really love the intellectual challenges required to invest successfully, and I find that I’m excited every day to continue developing my craft. I enjoy bringing quantitative data, qualitative information, and detailed analysis together to inform the decisions we’re making every day. As part of the process, I get to speak with some of the best investment talent in the world, which is pretty amazing. I really enjoy building relationships with both prospective and existing managers. Getting to know people on both a professional and personal level is incredibly rewarding, and I find that this only enhances the strength of long-term relationships.

On top of this, walking through the museum early in the morning or late at night, before our visitors have had a chance to arrive, is a real treat. I particularly love watching all the students visiting the Met, and seeing the inspiration in their faces. It’s a great feeling to know that I am helping to support such an amazing institution. What’s more, I work with incredibly talented and thoughtful people that make even the challenging days worthwhile. We also have a great investment committee that is a fantastic resource and is very supportive of the hard work we do within the investments office.

CIO: What’s the most challenging?

Reed: I’m a bit of a contrarian by nature, so I tend to become cautious anytime something becomes a consensus view, and this can often lead me to want to make decisions that are somewhat unconventional. That said, doing unconventional things is not easy, and in a lot of ways requires even more diligence. It can feel lonely and laborious, but deep research and being thoughtful about the process makes it easier to make those types of decisions.


CIO: What are you most hopeful about in the future of the industry?

Reed: I’m hopeful that we’ll see more progress in bringing different perspectives to the industry. Both in the allocator world and within the funds in which we invest, we still have a ways to go in terms of bringing in and maintaining diverse talent. For example, I’d love to see more women running investment firms. I want to do what I can to see that happen sooner, rather than later.


CIO: What are you most cautious about?

Reed: I do worry about the shorter-term focus I sometimes see in our industry, especially since one of our biggest advantages as endowments comes from having a long-term orientation. With a lot of the decisions we make, there are more shorter-term data points available. Because of this, I think it’s easy for people to focus on, and reward, shorter-term performance. It’s helpful to recognize, track, and analyze shorter-term data, but it takes practice to not get too distracted by them, as we should always be thinking strategically, with an eye focused on the long-term.  

CIO: As a leader, what are the most important aspects of the industry you hope to change over your career?

Reed: A couple of things come to mind. The first is rethinking the way we consider building a portfolio, which has historically been grounded in traditional asset allocation. We’ve already done a bunch of work to have a more holistic perspective for thinking about risk and return, and I think we will continue improving this over time. The second is that I’m always thinking about ways to refine our understanding of the best predictors of managers that generate strong risk-adjusted returns over a long time horizon. The more we can empirically test these factors, the more useful our research will be.


CIO: If you had one piece of advice for your peers, what would it be?

Reed: Seek out opportunities to work for, and with, great people who are also great investors. I’ve had the privilege to work with some of the best investors and capital allocators in the industry and I have been able to refine my personal investing philosophy that much more as a result. They have also happened to be great people that I really respect on a personal level. A related point is not to forget to seek out mentors who you really respect. They are invaluable.


CIO: What are the biggest current trends you are seeing that have surprised you?​

Reed: I have noticed some investors moving away from certain alternative strategies in favor of long-only equity, particularly US equities, given poor results in areas like “hedge funds.” I think moves like this may be a signal that some investors are looking in the rear-view mirror and investing how they wish they had been invested five years ago. We’re now in the midst of one of the longest equity bull markets in history and valuations are by no means cheap. On a bottom-up basis, I think we’re seeing more opportunities outside of domestic long-only equities, partially as a result of where we are in the market cycle.