“Albert was a great hire. He came to us from investment banking in the oil and gas industry, the traditional energy sector. That was an important perspective for us as the University of California began implementing our framework for sustainable investing. He’s been instrumental in helping us find sound, long-term investments in the clean industry sector and other key components of our real assets portfolio.”
—Jagdeep Bachher, CIO, University of California
Albert Lee helps lead the University of California’s (UC) efforts in real assets investment, covering a broad spectrum inclusive of agriculture, royalties, metals and mining, infrastructure, and energy. He’s led the underwriting of primary fund investments, secondary sales, as well as sourced and structured co-investments while taking a keen interest in the renewable energy sector.
Following a career as an IT consultant at Accenture, he earned his MBA in finance at Columbia Business School. Previously, he worked as a director of investment banking at Lehman Brothers / Barclays Capital, focusing on natural resources and infrastructure transactions.
Albert discusses with CIO how he and his team are riding the momentum of real assets investments for the betterment of the university’s total portfolio.
CIO: What makes 2019 an interesting investing climate? How are you handling it?
Lee: 2019 has been marked with continued volatility with fewer places to truly find value. With regulatory, trade, and political headline uncertainty, we have focused on downside protected, cash-flowing assets with upside potential in the private markets. The growing role of uncorrelated strategies that generate idiosyncratic returns have been a focal area to offset the effects of the volatility.
CIO: After this year, what are the largest opportunities and the largest threats you see on the horizon?
Lee: Today, to ignore risks related to climate change will be at the detriment to all institutional portfolios. On the other hand, this generates potential dislocation and opportunities to invest. De-carbonization mitigates risks imbedded in supply chains, coastal real estate, insurance, health care, transportation, and agribusiness, among other sectors that will be directly affected by extreme weather events and polluted natural resources. As technology risk and costs continue to decline in the renewable energy space, there are investments across the value chain that potentially generate healthy returns, with secular tailwinds and both private and public sector support.
CIO: How did you arrive at your current position? And why did you choose this part of the financial services industry?
Lee: To be honest, I am a recovering oil, gas, and coal investment banker who has had the fortunate opportunity to truly participate in the global, geopolitical nature of the incumbent energy complex. I was given the rare chance by one of my mentors in the industry to leverage my previous experience and apply it to and come work for a greater cause. It has been a rewarding experience to learn from some of the most intelligent thought leaders in the finance world, while furthering the mission and funding for a university and research system that is second to none. There is deep satisfaction to know the work that I do supports a broader set of initiatives for existing students, faculty, staff, and pensioners.
CIO: What was the most important strategic allocation of your career?
Lee: In 2017, I structured and seeded an early-stage venture capital fund focused on new energy and the sustainable economy. The impact of the relationship has had both tangible and intangible returns with far-reaching impact across the UC portfolio. Early-stage insights have given us visibility on developing technologies and potential disruptors in the space. Some of the early-stage portfolio companies have also been able to mine the mature portfolio companies at the UC for synergies. It has been an exciting time of learning and collaboration.
CIO: Tips for money managers who want to work with you, especially what not to do.
Lee: I think the UC Investment Office is a rare animal. We invest multiple different pools of capital, including the endowment, pension, defined contribution plan, working capital, and captive insurance assets for all 10 campuses, five hospital centers, and three national labs. It helps when managers do their homework on our organization and are thoughtful about the products they present. We are not only an investment office, but the UC system is a vital consumer and generator of energy, products, and thought leadership, which should not go unnoticed.
CIO: Biggest goof a money manager has made with you?
I have had the honor of being mistaken for an extremely dapper colleague of mine, Edmond Fong. This has happened more than once by more than one manager to the point where Edmond and I have created a hashtag for ourselves: #Almond
Lee: Who in the financial world would you like to have lunch with and why?
I would love to have lunch with Michael Bloomberg. I think he’s done an incredible job building a business, running New York City as mayor, and I would love to pick his brain on where he sees things going next.
CIO: What are changes you’d like to see the institutional investing community make in 10 years?
I believe there is a continued need for both diversity and inclusion at all levels of the institutional investment value chain. A variety of viewpoints, coupled with intellectual honesty, will result in more balanced investment decisions.
Lee: What are your hobbies not correlated to work?
These days, my priority and focus outside of work is my family. Our 1.5 year old son has recently started taking soccer lessons, and I am patiently looking forward to cheering on a future Tottenham Hotspur!
