This interview is a true master class for anyone interested in capital allocation and manager selection. We had the great pleasure to speak to David Salem, the Co-Chairman of New Providence Asset Management, a firm that provides investment office solutions for endowments, foundations and family offices. David is also a contributor to Epsilon Theory, an online community in which he writes extremely thoughtful articles about investment management and combines it with his passion for the game of baseball.
Before assuming his current post, David served as a Managing Partner at Windhorse Capital Management, which merged with New Providence in 2018. For almost two decades before that, David served as the Founding President and CIO for the Investment Fund for Foundations (TIFF), a non-profit investment cooperative that managed over $8bn on behalf of more than 700 endowed charities by the time he left.
The topics discussed include:
02:00 – David’s background
06:00 – David’s opinion what it takes to become a great investor
10:00 – The Endowment Model and why David thinks it may be dangerous for institutions to try to replicate it
16:00 – How does David thinks about diversification, as well as his thoughts on how to design an investment program
24:00 – David’s thoughts on how one should account for human biases in the measurement of risk tolerance
33:00 – David’s thoughts on Private Equity and crypto currencies
39:00 – David’s personal process on how to select investment managers
43:00 – Characteristics David looks for (and seeks to avoid) in vetting money managers
49:00 – How does David prepare for a first meeting with a money manager, and what he spends the first meeting on
55:00 – What David thinks about the use of Investment Committee in making investment decisions
59:00 – How does David decide on how when to part ways with managers he has invested in
62:00 – David’s thoughts on mentorship
Please keep in mind this is not investment advice. Full disclaimer at the end of the podcast.
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Luke, Leo & Andy