15 Signs You Were a CIO in 2015 (Sorry Managers, You Won’t Get #8)

1. Mouthwatering leadership jobs at outsourced-CIO (OCIO) firms tested every ounce of your commitment to the ‘mission’… Or maaaaybe they allow you to share your talent and serve MORE institutional missions… right? Either your spouse is pretty mad you’re still driving a Honda, or you’re having that multi-million OCIO cake and munching it, too. You know who you are. Cake tastes pretty good, right?

2. … But you still saved the contact info for David Barrett, recruiter extraordinaire. Just in case.

3.You Could. Not. Stop. Watching. the slow motion Bill Gross-PIMCO trainwreck unfold—even though you’ve long since decided to jump ship or stand by Newport Beach’s bond giant. Gross’ lawsuit accusing now-CIO Dan Ivascyn of plotting a coup after greed-crazed Mohamed El-Erian dropped the mic to open a Cheesecake Factory and THE WHOLE TIME managing director-cum-mutineer Andrew Balls was backchanneling everything to the Financial Times on a burner cell phone? Keep up with that, Kardashians. Still, you would absolutely trade every boring business publication out there for one single solitary New York Post cover: “Balls Leaks Gross Dirt!”

4. Board meetings comprised roughly 41% of your waking hours—and 3% of your sleep time. Even running hours over time, every time, you never managed to get to that direct lending/derivatives overlay/factor-indexing education session. Or, luckily, the one on risk parity…

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5. Unmentionable body parts clenched in August when your risk parity manager’s performance figures rolled in—and clenched they remain. Ray Dalio and Cliff Asness better be the geniuses you’re paying them to be.

6. Student groups/politicians/trustees/unions/tree-hugging stakeholders of all flavors delivered petitions and board meeting lectures explaining that fossil fuels are the devil—and so are you if you don’t drop them like they’re hot. Frankly, $40/barrel oil makes a far more persuasive divestment case than these *ahem* vocal groups ever have—but don’t tell them that. Exceptions to #6: Colin Kerwin at ExxonMobil, Mark Thompson at BP. They would gleefully host a weekly vegan dinner party for the Sierra Club if it brought their budgets, stock options, and office morale back to life. Tofurky for everyone!

Art by Kyle T Weber

7. Donald Trump’s plan to build a wall across the Mexican and Canadian borders sounded like a not half-bad infrastructure investment. With a 10% flat income tax and no deficit spending, the US government would need construction capital from somewhere. (Plus, you suspect the financing model might not price in the manual labor market. If demand rises as supply plummets… suffice to say it’s a liquid lender’s market.)

8. Brushing off the Power 100 as nepotistic tit-for-tat ego-stroking BS got a touch harder with this year’s five-factor scoring formula. Sixteen out of thirty for innovation?!? Who do these millennial Canadians at CIO think they are? First-time inclusions and list-climbers welcomed the judicious and robust accounting of their skills.

9. Every time you thought about liquidity in the credit market, your stomach reacted like it does to your kid’s theater major. And to the $45,000 tuition bill that’s coming up. Foreboding, definition of: See #9.

10. You read about the s&%*storm that was Stanford’s endowment with a wee bit of schadenfreude… and a whole lot of pity for the youngsters who were collateral damage. That elite university endowment clique has problems just like the rest of you. Theirs just fester longer. For all that you curse those damned webcasts and open-to-the-public investment board meetings, transparency has its upsides.

11. Janet Yellen guest-starred in a recent dream. When you woke up, you had to talk yourself out of putting on a position based on dream-Yellen’s secret rate-timing intel.

12. You lost your mind at the federal budget ‘deal’ which YET AGAIN cooked the books with ANOTHER completely LUDICROUS hike in PBGC premiums. Thanks Obama! Thanks Boehner! Everyone knows retiring on a 401(k) is like planning a transatlantic flight in a Cessna, and what do our dear leaders do? Ground the one last 777 still making the trip. You want 80-year-olds stripping for Lipitor??

13. The line “higher returns with lower risk” triggers a Pavlovian response to compile your grocery list. “… Milk, coffee filters, lunch stuff for the kids—‘Oh, sorry what? Sounds fabulous, almost too good to be true!’—chicken breast, Coronas…”

14. In college, you were already dead set on the pinnacle of finance: Goldman. Sachs. Investment. Banker. Obviously, it was the coolest of the three money-industry careers you know about at 20: Old rich people’s portfolio manager, shouty, wavy trader guy, and I-banker. (You were down with the lingo, SO ready.) A few years later, you’d stumbled on ‘institutional investing’ and never looked back. Now, you can’t help but smile at how naïve you were: Imagine thinking investment banking actually involved investing! Sigh. Without that lucky detour, you’d be managing PowerPoints instead of a multi-billion portfolio right now. Shudder…

15. Wheeling and dealing in Armani suits? Meh. Making bank for the mission? Nothing better. Well, maybe making bank for you and the mission(s)… So, Ivy endowments or OCIO: What could go wrong?

Winning venture capital investments are no longer controlled by a handful of top managers, according to Cambridge Associates.

Thanks to a maturing industry and evolving markets for technology and health care, a diverse group of new and emerging venture capital managers are creating value for limited partners, the report said.

The consulting firm’s data revealed an average of 83 companies each year generated value in the top 100 venture capital investments from 1995 to 2012.

Furthermore, investments ranked below the top 10 deals earned an average of 60% of the total gains per year after the tech bubble, the report found. This is a sharp contrast to the pre-2000 period, Cambridge Associates continued, during which the top 10 investments generated an average of 57% of total gains.

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“While much is being said about unicorns, defined as venture-backed companies that achieve a $1 billion valuation, investors should stay in vigilant pursuit of those managers making venture investments that deliver substantial total gains on the valuations they have paid,” the report said.

The composition of managers is also changing, according to the report.

While Silicon Valley firms continue to invest in the top 100 investments, emerging managers claimed 40% to 70% of total gains over the last 10 years, “a clear signal to investors to maintain more constant exposure to this cohort.”

Managers with smaller funds—less than $500 million—have also accounted for at least 50% of the total gains in the winning investments since 2005, the report said.

These changes in the venture capital markets may necessitate firms and managers to be just as dynamic and entrepreneurial to survive.

“Venture firms can no longer simply compete on capital alone; entrepreneurs today have options and venture capital is not the cottage industry it once was,” the report said.

Cambridge Associates warned that only institutions with long time horizons and the ability to withstand negative returns should dive into venture capital.

“This is not appropriate for investors with short-term performance objectives, or those not comfortable with spending both time and money over many years to understand the ever-changing opportunity that is venture capital,” it said.

Cambridge VC Source: Cambridge Associates “Venture Capital Disrupts Itself: Breaking the Concentration Curse”