“Kelli has been able to effectively harness and analyze a vast amount of data and macro trends that underlies [the] asset allocation effort for the multiple portfolios we oversee. I feel like we’ve benefited from the experience she acquired in the consulting world that has resulted in an ability to simultaneously manage multiple investment policy frameworks and asset allocation structures. Combine that with a can-do attitude, it’s an unbeatable combination that makes her a star on our team.”
— Stefan Strein, CIO, Cleveland Clinic Investment Office
With over 20 years of experience in investment management and due diligence, Kelli Washington serves as the managing director of research and investment strategy at the Cleveland Clinic Investment Office. Washington works to reshape and implement contemporary investment policies that align with market trends that pinpoint significant areas for growth and capital deployment for institutional investors, including emerging markets such as the Middle East and Asia.
Washington was previously a managing director at Cambridge Associates, where she worked for nine years advising universities, foundations, trusts, and family offices on best practices to synthesize optimal portfolio performance. Prior to that, she worked for 10 years as a portfolio manager at Edward Jones Trust Company, where she worked on portfolios of fixed income securities and equity for a variety of different trust structures.
Washington sits in on this NextGen series to discuss how a health care-centric investment office is setting its sights for robust performance in the future by capitalizing on significant, undervalued opportunities all around the world.
CIO: What makes 2019 an interesting investing climate? How are you handling it?
Washington: The continued development of investment opportunities for institutional investors including the expansion of markets in China, India, and Saudi Arabia. To be able to think about how we can help companies in these and other markets to grow and expand while earning a return that will serve our mission is very exciting. Similarly, the opportunity to research/invest in and with strategies focused on health care innovations that will improve health outcomes as well as improve the ability of health care organizations such as ourselves to serve our patients and their families is a unique benefit of working for a world-renowned center of health care excellence.
CIO: After this year, what are the largest opportunities and the largest threats you see on the horizon?
Washington: The opportunities will come from the expanded investment options in markets such as China, India, and Saudi Arabia, as mentioned above. There are many smaller businesses with strong operating models and opportunities to expand/develop their markets who need capital. It is our responsibility to assess the risk/reward and if it is sufficient, provide the capital needed to benefit the company, their customers, and our portfolio in support of our mission. The largest potential threats are a meaningful economic slowdown combined with protectionism and a decline in civil discourse.
CIO: How did you arrive at your current position? And why did you choose this part of the financial services industry?
Washington: I was introduced to our CIO through a network of friends who knew me and our CIO. At the time, he was looking to build an office/team and my friends thought I would be a good fit given my professional background combined with the fact that I am a native Clevelander. From my perspective, this was a unique opportunity to join our CIO in building an office and a culture from the ground up with the support of a world-renowned health care organization that seeks excellence in everything it does.
I developed an interest in endowment/foundation management after serving as student representative to the board of trustees at my college and sitting on the finance committee. It was through that experience that I came to understand the role and importance of having a pool of assets to support operations, research, and scholarship. As a recipient of a full-tuition scholarship, the responsibility and importance of such a pool of assets resonated with me. While it took some time, I eventually began to transition my career from helping individual investors meet their goals to leading teams investing on behalf of mission-focused institutions.
CIO: What was the most important strategic allocation of your career?
Washington: Convincing the investment committee in my prior role to add private equity investments to their portfolio was the most important strategic allocation of my career. The institution had not previously invested in private structures and had been burned by hedge-fund side-pockets coming out of the financial crisis. Given the financial obligations of the organization and the limited ability to reduce payout, adding a strategic allocation to private equity across several sub-asset classes was the best solution to achieve the required return.
CIO: Tips for money managers who want to work with you, especially what not to do.
Washington: While persistence is important, do it without causing annoyance. That advice goes both ways. Just as managers are interested in having us invest with them, there are managers where we have an interest in making an investment. What works best is to clearly communicate what you bring to the table, understand if what you bring to the table is desirable to the other party by asking questions and listening to the responses, and, assuming the needs/goals are mutual, consistently make your case for how you (GP or LP) will be good partner for the other party.
CIO: Who in the financial world would you like to have lunch with and why?
Washington: I don’t have a great answer for this question. While I have a tremendous amount of respect for peers and the many successful investors in our industry, I appreciate spending time with people who do something different than what I do because they think about opportunities and challenges differently, encouraging me to question and explore my assumptions. In the last few years, I have been fortunate to hear stories of success and failure from Geoffrey Canada, President George W. Bush, Cokie Roberts, Harry Belafonte, Madeline Albright, Gov. Jeb Bush, Gen. David Petraeus, Anderson Cooper, and Trevor Noah. Having an opportunity to have lunch with any one of these people would be fascinating!
CIO: What are changes you’d like to see the institutional investing community make in 10 years?
Washington: A concerted effort to attract, develop, promote, and retain women and people of color in greater numbers.
CIO: What are your hobbies not correlated to work?
Washington: I love to travel globally and especially spending time in the Caribbean. I am a foodie (my father and sister were professional cooks/chefs in past lives) and enjoy trying new restaurants with friends and/or hosting the occasional dinner party. I enjoy live theater having grown up around a small, local theater company where my mother worked as business manager.
