Such movements also enable the firm to offer a broader worldview to clients in each region, and overcome the geographical boundaries between offices. It will be the managing director of Cambridge’s London office, Christopher Hunter, who will undertake the big job of opening the Beijing office. There he will lead an initial team of three in research programs designed to understand investment opportunities in China, and will provide on-the-ground support to clients in that market and seek out prospects. When Urie returns to the Boston headquarters of Cambridge, she does not want to merely relay what she has learnt and reacquaint herself with a familiar US-centric view. She plans to continue to regularly visit the region, for up to three weeks at a time, rather than a few days, and continue to work as a roving CEO. “It’s about maintaining the momentum.”

On campus Perhaps the clearest distinction Cambridge makes from its competitors is its competencies around the style of investing that has become known as the endowment model. This style gained notoriety throughout the professional investment industry as the Yale and Harvard university endowments posted impressive returns that were attributable to large investments in hedge funds, venture capital, timberland and other alternatives. Observing this, some pension funds began eyeing these strategies – particularly as they sought to diversify away from equity beta after the collapse of the dotcom bubble. Talk of ‘endowment envy’ percolated through industry commentaries. But the financial crisis brought an end to the long stretch of outperformance enjoyed by many endowment-style investors as liquidity pressures and the market rout of 2008 unceremoniously grounded their consistent doubledigit returns.

Like all asset allocation strategies, endowment-style investing was challenged by the systemic breakdown of the financial crisis and the ensuing volatility and liquidity scarcity. “Those weekend events” – Urie says, employing a euphemism to describe the 2008 Wall Street banks crises – “just kept coming.” But not all endowment investors fared terribly. About 80 per cent of Cambridge’s clients did not experience liquidity problems during this period, Urie says. Like other investors, they learned some lessons: absolute portfolios can decline – they don’t have a “floor” – and investment risk should be viewed in dimensions other than volatility. It also takes the form of leverage, liquidity, equity beta, currency, inflation, interest rates, credit spreads and exposure to active management. “We’ve been doing modelling in trying to get at how you can deconstruct that overall volatility in a portfolio and assign it accordingly,” Urie says, adding that investors have taken these lessons on board rather than becoming shy of risk. “I don’t think the stomach for risk has been hurt. It’s more about understanding the risks you’re taking and why.”

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