Bob Boldt on Endowment Models and CalPERS

I interviewed Bob Boldt yesterday, as part of Buyouts Texas. For the uninitiated, Bob is a former CalPERS staffer who went on to become chief investment officer at UTIMCO. He now runs the Agility program for Perella Weinberg, which basically tries to replicate the “large endowment” model of investing. Some quick hits from the interview:

* Bob defended the endowment model, despite the current troubles faced by some of its practitioners. He says the key isn’t allocation, but trying to be a first mover into new asset classes. First into venture capital, first into private equity, first into emerging markets real estate, etc. He acknowledges that endowments didn’t act fast enough when they saw liquidity drying up, but still believes the model will prove superior over time.

* Boldt left CalPERS in 2001, but did discuss the current pay-to-play allegations. “I can categorically say that no one ever told me that I had to make an investment… Sometimes members of the board would ask me to look at things, but never insisted that I recommend them.” He did say that the board once gave more money to a GP than Boldt had recommended, but “I didn’t try to figure out why, since I had already supported an investment in the fund.”

He did acknowledge, however, that certain finders had cozy relationships with board members, outside of interactions with investment staff.

Boldt also made an interesting observation about the CalPERS board structure. Said that when he was there, state government was controlled by Republicans, which meant the board was politically-split (appointed members were Republican, voted union reps were Democrat). Says the tension acted as a check on either side doing something unseemly. He wonders if that check became absent once Democrats took over (at least for a while) in Sacramento.

* He opposes the proposed SEC ban on placement agents, but supports political contribution ban (or at least full disclosure). Says that when he gets a lousy GP presentation, it’s usually the placement agent who provides the relevant information.

* Says one of his proudest moments at UTIMCO was during the disclosure debate, when the school began releasing fund-specific performance data (but not underlying asset information). During Q&A, a current UTIMCO staffer says the move, while unpopular with many GPs at the time, has provided GPs with a comforting level of certainly over what will, and what won’t, be disclosed.