“Since arriving at the National Gallery of Art, Christine has performed her duties as the chief of investments in a very thorough and thoughtful way. She has quickly gotten her arms around the Gallery’s diverse portfolio and moved us forward on a number of key initiatives.”
—William McClure, Treasurer, National Gallery of Art
Shepherding the $1 billion endowment at the Washington, D.C.-based National Gallery of Art to support a world-class art institution and collection accessible to the American people free of charge is Chief of Investments Christine Kelleher. Kelleher exercises the skills she’s learned from her prior experience in managing endowments and institutions of similar sizes to make this vision a reality.
Prior to the gallery, she helped manage Georgetown University’s endowment and retirement plan, where she assisted in founding the investment office in 2004 and assumed the role of interim chief investment officer in 2011. Subsequently, she joined Avec Capital, a boutique investment advisory firm where she led the office’s investment strategy, sourcing, and evaluation efforts.
Kelleher speaks with CIO to discuss how she believes the gallery’s portfolio can be best adjusted for today’s volatile markets, the issues she sees in spearheading a portfolio of this size in rough waters, and her visions for the future.
CIO: What makes 2019 an interesting investing climate? How are you handling it?
Kelleher: Dispersion is back in the markets and in manager alpha. I’m talking to our investment managers even more often to get a pulse on what they are seeing and where inefficiencies and new opportunities might be identified.
CIO: After this year, what are the largest opportunities and the largest threats you see on the horizon?
Kelleher: The largest opportunities are also the greatest threats: technological disruption. The global economy is being reshaped by technological change, which is creating both opportunities and new risks. In our industry, it’s fueling short-termism. Staying disciplined in asset allocation and in portfolio risk management is as important as ever.
CIO: How did you arrive at your current position? And why did you choose this part of the financial services industry?
Kelleher: I was pursuing a Ph.D. at Georgetown when Larry Kochard was appointed as the university’s first CIO. After a decade in nonprofit start-ups, most notably at George Soros’ Central European University in Budapest, I thought I was joining Larry temporarily to help him design and launch the internal investment effort. That was 15 years ago.
This part of the industry rewards intellectual curiosity and a long-term perspective. You’re constantly on the steep slope of the learning curve to master a theme, understand a niche part of the market, test a manager’s investment thesis. But the purpose-driven nature of what we do—helping kids get an education, keeping the Gallery’s collection accessible to the American people free of admission—is what truly inspires me day to day.
I came to the Gallery a year and a half ago. I find it inspiring and rewarding to engage with the Gallery’s leadership in understanding the institution’s enterprise risk and evolving the investment approach and portfolio to support its mission.
CIO: What was the most important strategic allocation of your career?
Kelleher: Sticking by—and increasing our allocation to—long/short hedge funds. The markets have been tough for fundamental stock pickers and for short sellers for many years, but I believe they serve a long-term role in improving the risk/return profile of a portfolio. However, that also means periodically refreshing the portfolio to include new, young (in terms of age of firm), hungry talent. If a PM buys a sports team, it might be time to move on.
CIO: Tips for money managers who want to work with you, especially what not to do.
Kelleher: If I had a dollar for every time a money manager spoke to the men in the room instead of the woman who was actually running the manager search, I could start my own foundation. Diversity in the workplace is becoming part of common discourse, but there is still a long way to go, particularly in the financial services industry.
CIO: Biggest goof a money manager has made with you?
Kelleher: At the end of a pitch, a PM noted: “Bet you didn’t notice I skipped over the risk slide!” My response: “Guess you didn’t notice I dog-eared it.”
CIO: Who in the financial world would you like to have lunch with and why?
Kelleher: It’s admittedly redundant, but if I’m going to be honest, the historian in me would be delighted by a one-on-one with David Swensen. I’d pick his brain not only on the evolution of his investment approach and team, but also and especially on the governance structure and process he’s perpetuated at Yale.
CIO: What are changes you’d like to see the institutional investing community make in 10 years?
Kelleher: I would like to see the acceptance of more innovation in investment vehicles. Not all strategies are suited for annual liquidity or a 10-year drawdown structure (how many drawdown structures actually return capital in 10 years?) The lack of innovation in our structures for investing capital limits the breadth of opportunities in which we can invest.
CIO: What are your hobbies not correlated to work?
Kelleher: I have insatiable wanderlust. When I can’t be on a plane or train, I enjoy spy movies and novels. They take me back to places I’ve been, inspire me to see places I haven’t, and remind me how rusty my language skills have gotten.
