“When Venus joined us in early 2019, she brought with her a breadth of experience across consulting, endowments, and pension management. She hit the ground running, helping us fine tune our public equity portfolio before turning her attention to helping lead our private market efforts. Her new private market role rounds out her extensive background in the public markets, setting her up to become a next generation CIO.
“Venus also leads our recruiting efforts and has helped us make great progress in our diversity efforts. She is a champion of our ‘25% by ’25’ pledge to have 25% of our US assets invested with women and people of color by 2025. She combines these accomplishments with an intense curiosity and kind demeanor, making her a joy to work with. I look forward to watching her reach new heights.”
—Robert Manilla, CIO, the Kresge Foundation
Venus Phillips, CFA, CAIA, has garnered experience from all over the investing world, working at a Wall Street firm, a university endowment, a research group, a large manufacturer, and now a large foundation, where she is an investments director. With a bachelor’s degree in business from Howard University, graduate work at the University of Cape Town in international economics, and a Master of Business Administration from the University of Chicago, she brings a lot of intellectual heft to her work.
She began her career as an analyst at JPMorgan Asset Management’s estate planning group, then went to a fund of funds that ended up closing, and on to the University of Chicago’s endowment, as a portfolio analyst specializing in absolute return and public markets. At Morningstar, the research outfit, she was an investment manager, with a concentration on mutual fund portfolios. At Fiat Chrysler, Phillips returned to her native Michigan. For the automaker, she first managed international equities and next headed up public markets.
She joined the Kresge Foundation in April 2019, as an investments director, and focuses on private markets: private equity, real estate, and natural resources. In general, Phillips notes that, despite having a lot of cash on the sidelines, investors have difficulty deploying it due to high valuations.
CIO: How would you deal with rising inflation and interest rates?
Phillips: The market’s concern around looming increases in inflation and interest rates has brought down return expectations for nearly all asset classes, which makes it more challenging for many institutional investors to meet their return targets. Cash-funded investments in inflation- and rate-linked assets generally fall below these target returns as well. So with that, I would deal with rising inflation and rates by investing in unfunded derivative positions, such as inflation swaps or interest rate swaptions, for example, which allow me to hedge that exposure while still deploying cash in opportunities with higher risk-adjusted return expectations.
CIO: What is the best way to bring more diversity to the financial industry?
Phillips: As the great poet and footwear manufacturer Nike says, “Just do it.” Talent is evenly distributed across demographic groups, but opportunity is not. Yet, so often, leaders in our industry say the pipeline isn’t there. That’s because the pipeline doesn’t meet our pattern recognition of what makes a qualified candidate. If we step outside of our networks (which typically look like ourselves in person and on paper) we’ll see there’s a world of brilliant, driven talent right under our noses.
CIO: What are your favorite alts, and why?
Phillips: My favorite alt is real estate. Specifically multifamily housing. The supply/demand dynamics in that space make for an attractive economic case, especially for affordable housing, where one in four people who qualify for affordable housing actually have access to it. And given that imbalance, there’s a great opportunity to make investments that expand affordable housing stock, thus creating opportunity for residents to thrive in their homes and their communities. This one property type may seem like a drop in the ocean of the impact investment landscape, but studies have shown that affordable and accessible housing improves children’s performance in school, families’ mental health, and workforce productivity, and reduces incarceration rates.
CIO: How will the pandemic have changed the economic/financial world?
Phillips: I think that’s yet to be determined. My guess is that, going forward, the way we work will change. We’ll have more remote meetings. Those day trips out of town are likely a thing of the past. Such flexibility could lead to better work/life balance for many people in our industry.
CIO: What place does blockchain hold in tomorrow’s financial scene?
Phillips: Center stage. Blockchain has the potential to revolutionize financial technology. It’s a game changer for insurers, custodians, and issuers if we can make decentralized smart contracts and automate many of the finance functions that are manual today. But, frankly, it will take time. Blockchain technology is relatively new to our industry and can be complicated to build and access. As we improve our understanding and build on-ramps for the protocols, I wholeheartedly believe we’ll begin to see wide adoption of the technology.
CIO: Where do you see the most exciting areas to specialize further over the coming years?
Phillips: Anything related to blockchain, including the network infrastructure, cryptocurrencies, nonfungible tokens (NFTs), and everything in between. If blockchain is indeed widely adopted in the future, the finance and investment industry will be well served by understanding the ins and outs of this groundbreaking innovation.
CIO: What asset class or investment troubles you most right now—and why?
Phillips: SPACs [special purpose acquisition companies]. Investors—institutional and retail alike—have a lot of money on the sidelines right now. Interest in these blank check companies has grown to a point where a bubble ke a seems inevitable.
CIO: Who is the manager you don’t currently work with whose brain you’d most like to pick for an hour?
Phillips: Warren Buffett [of Berkshire Hathaway]. The Oracle of Omaha.
