The $80 billion Queensland Investment Corporation (QIC) has invested in a second manager with strategies modeled on those of elite US university endowments.
QIC has invested US$200 million in GEM, or Global Endowment Management, which was founded in 2007 by former senior executives at Duke University, including Thurston Morton, the former CEO and CIO of Duke University Management Company, and Stephanie Lynch, former CIO of the Duke Endowment. The GEM website states that the manager runs funds “;structured as private investment partnerships that seek to replicate the investment style employed by leading university endowments”;. Consequently, it aims to exploit a long-term horizon and “;non-traditional”; investments. GEM is based in Charlotte, North Carolina, and counts two members of the US President’s working group on financial markets among its advisory board members. QIC’s mandate follows a US$650 million allocation, made in 2007, to Makena Capital Management, an alternatives manager that runs one product, a pooled endowment fund, and is understood to be led by the former chief executive of the Stanford university endowment, Mike McCaffery. This saw QIC become one of eight foundation investors in Makena. Brad Holzberger, the chief executive of QIC Asset Management, said the portfolios run by the endowments-style managers held “valid and well-diversified exposures” and also afforded the Queensland manager an insight into their investment thinking. “A lot of what they do isn’t proprietary,” Holzberger said. Makena invites two representatives from its foundation investors to four full-day meetings each year in which the clients are given the opportunity to “;grill”; key management and board members about their investments and processes, Holzberger said. A representative from QIC has attended such meetings in the past.
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
