Fall Forum Faculty FORUM HOST Nancy M. Szigethy Founder NMS Management, Inc. FORUM CHAIRMEN Sally M. Dungan Chief Investment Officer Tufts University Jeff Pippin Senior Vice President & Chief Investment Officer Pepperdine University Paula J. Volent Senior Vice President for Investments Bowdoin College FEATURED SPEAKERS Paul Tudor Jones II Co-Chairman, Chief Investment Officer Tudor Investment Corporation Daniel S. Loeb Chief Executive Officer Third Point, LLC Clifton S. Robbins Chief Executive Officer Blue Harbour Group, L.P. Robert E. Rubin Co-Chairman Emeritus Council on Foreign Relations Former Secretary of the U.S. Treasury Jeremy C. Stein Governor, Federal Reserve Board (2012–2014) Professor of Economics Harvard University Roger Bootle Chairman Capital Economics Ltd. Chris Giles Economics Editor Financial Times Katty Kay Lead Anchor BBC World News America JP Pawliw-Fry Emotional Intelligence (EQ) Thought Leader Leadership, Performance And Change Expert 2 SPEAKER FACULTY Kristin A. Agatone Chief Investment Officer Lehigh University Prakhar Bansal Managing Director of Strategy The University of Chicago Americo Cascella Partner Ares Management, LLC Eli Casdin Chief Investment Officer Casdin Capital, LLC Sumir Chadha Managing Director WestBridge Capital Amy L. Chen Chief Investment Officer Smithsonian Institution James G. Clarke Senior Vice President, Investments and Treasurer Kansas University Endowment Association KC Connors Partner NEPC, LLC Greg DeNinno Managing Director - Private Investments Howard Hughes Medical Institute Adam Duncan Head of Portfolio Modeling and Quantitative Research Cambridge Associates LLC Ellen J. Ellison Chief Investment Officer University of Illinois Foundation James J. Floyd Vice President and Chief Investment Officer Claremont McKenna College Graeme Forster Portfolio Manager and Partner Orbis Investments Venky Ganesan Managing Director Menlo Ventures Kate Gordon Senior Advisor Paulson Institute Chris Halaska Senior Vice President and Chief Investment Officer Memorial Hermann Health System Alice W. Handy President and Chief Executive Officer Investure, LLC Ben Inker Head of Asset Allocation GMO, LLC Barry Kaplan Director - Absolute Return & Commodities National Railroad Retirement Investment Trust Stephen Kirk Chief Investment Officer Pelham Global Financials Ltd. William D. Lee Senior Vice President and Chief Investment Officer NewYork-Presbyterian Hospital Michael J. Levitt Chief Executive Officer Kayne Anderson Capital Advisors, L.P. Robert Litterman Senior Partner Kepos Capital, LP Henry H. McVey Head of Global Macro & Asset Allocation and Private Markets Risk CIO of the KKR Balance Sheet Samuel Norvell Associate Director, Hedge Fund Investments The Annie E. Casey Foundation André F. Perold Co-Founder, Managing Partner and Chief Investment Officer HighVista Strategies, LLC Tushar Poddar Macroanalyst Wellington Management Company LLP Andy Rothman Investment Strategist Matthews Asia Rob Roy Vice President/Chief Investment Officer Adventist Health System Puneet Saraogi Co-Founder and Managing Partner Bay Capital Partners LLP Jonathan L. Shear Chief Investment Officer The University of Utah Mas Siddiqui Founder and Chief Investment Officer Naya Capital Management UK Ltd. Josh Stein Partner DFJ Joshua B. Stern Director of Private Investments Robert Wood Johnson Foundation Warren M. Stock Director, Public Investments Robert Wood Johnson Foundation Antoine W. van Agtmael Former Principal Founder and CEO Emerging Markets Management LLC Senior Adviser Foreign Policy Analytics Kathleen Vogelsang Chief Investment Officer Van Andel Institute Andrew Weisman Chief Investment Officer Liquid Alternative Strategies Windham Capital Management Shawn D. Wischmeier Chief Investment Officer Margaret A. Cargill Philanthropies Jamie Ziegler Founder JZA Coaching 3 Schedule Sunday, September 10, 2017 4:00 pm - 5:00 pm Early registration will be held in the Hotel Lobby Early Registration 5:30 pm Please join us at the Opening Reception. Opening Reception Monday, September 11, 2017 7:30 am 8:15 am Welcome & Introductions Remarks from the Forum Chairmen 8:30 am Opening Address: Challenges for Central Banks in 2018 and Beyond 9:30 am China: A Deeper Dive Forum Registration and Continental Breakfast Nancy M. Szigethy, NMS Management, Inc. Sally M. Dungan, Tufts University Jeff Pippin, Pepperdine University Paula J. Volent, Bowdoin College This presentation will touch on some of the key challenges facing the Federal Reserve and other global central banks in the coming year. Among the questions to be considered: what is the medium-term outlook for the U.S. and global economy? Are we really stuck in a world of secular stagnation, with growth prospects likely to remain subdued for the foreseeable future? If so, what does this imply for the path of policy rates, both in the U.S. and other developed countries? What are the likely impacts of the Fed’s planned shrinkage of its large balance sheet? What regulatory changes are we likely to see, and what will be the consequences for banks and financial markets? Speaker: Jeremy C. Stein, Governor, Federal Reserve Board (2012–2014); Harvard University During this session, a framework will be presented for thinking about the Chinese economy and what the potential implications may be for investors. 2017 has proven to be a dynamic year, with political forces influencing relations between the U.S. and China, and investors remaining uncertain about what the future may hold. Given the possibility of confrontation on a range of issues, including North Korea and the question of international trade, the implications may be significant. Will the relationship between Trump and Xi continue to blossom? Corporate profits are up and stock markets have improved – is this sustainable? How will financial markets react and what might the consequences be for global investors? During this session, Mr. Rothman will help contrast the headlines that may drive short-term sentiment toward China with the long-term fundamental drivers of China’s secular economic growth, highlighting risks and investment opportunities. Speaker: Andy Rothman, Matthews Asia 4 Schedule Monday, September 11, 2017 10:15 am Break 10:45 am Current Perspectives on Asset Allocation During this session two highly seasoned practitioners will discuss their views and opinions about how investors might contemplate asset allocation in the current environment. What are the macroeconomic influences that should factor into decisions about the design of asset allocation? What trends across the globe will have impact on the investment landscape? To what extent will lower returns characterize the investment environment for years to come? If this is the case, then where will investors find the most attractive opportunities? The discussants will assess the potential for returns among various regions, asset classes and sectors across the globe, while also sharing their views on the dilemma of active versus passive investing. Conducted by: Alice W. Handy, Investure, LLC Discussants: Ben Inker, GMO, LLC Henry H. McVey, Kohlberg Kravis Roberts & Co. Extracting Alpha: Active Ownership in 2017 An Interview with Clifton S. Robbins, Blue Harbour Group, L.P. In this interview, Mr. Robbins will share his ideas on investment topics, offering his comments on the current environment and specific investing themes. Mr. Robbins will talk about his perspective on activist investing, and his views about how ESG factors can be integrated into an investment strategy to mitigate risk, among other subjects. Conducted by: Warren M. Stock, Robert Wood Johnson Foundation Interviewee: Clifton S. Robbins, Blue Harbour Group, L.P. India is the fastest growing G-20 economy. The Modi government, on an economic reform spree, has introduced the nationwide sales tax (GST) to improve the ease of doing business, passed a new bankruptcy law and shocked the country with the demonetization move late last year. Every Indian can now be uniquely identified thanks to the Aadhaar card. The costs and benefits of some of these reforms are still being debated. This session will bring together seasoned public and private equity investors to analyze the macroeconomic landscape as well as sector and stock specific opportunities in India. Venture deals and exits, growth of the consumer markets, as well as changes in the banking and IT sector will be discussed. Conducted by: Prakhar Bansal, The University of Chicago Discussants: Sumir Chadha, WestBridge Capital Tushar Poddar, Wellington Management Company LLP Puneet Saraogi, Bay Capital Partners LLP 11:45 am Warren Stock in Conversation with Clifton Robbins 12:30 pm Luncheon 1:30 pm India's Economic Reforms: Opportunities and Challenges 5 Schedule Monday, September 11, 2017 2:30 pm Portfolio Management: A Focus on Investment Process The necessity to support institutional objectives, and the need to generate returns while mitigating risk remain the constant focus of CIOs, whose role and responsibilities have become increasingly complex. Amid a complicated macro environment, what changes might investors contemplate to prepare their portfolios for the challenges that lay ahead? This discussion will explore the practical aspects of implementing an investment process and the importance of having a strong governance structure in place to support it. Is a defined investment process able to stand the test of time through market cycles? What characteristics within an organization and among a team strengthen the investment process? In addition, other key questions to be raised include: What information does the investment team pay attention to, and how is data analyzed? How is information used to enhance investment decisions? Our distinguished CIO participants will engage in a thoughtful exchange of ideas related to investment process and portfolio management. Conducted by: KC Connors, NEPC, LLC Discussants: Chris Halaska, Memorial Hermann Health System William D. Lee, NewYork-Presbyterian Hospital Rob Roy, Adventist Health System This session will explore the structural changes that have taken place in credit markets which have resulted in opportunities across investment sectors for investors. Filling the void of banks no longer offering financing, alternative debt providers are providing new sources of funding and liquidity. What are the risk characteristics in the current environment? What criteria should investors apply when selecting a manager? How will potential regulatory changes impact the strategy? This discussion will explore the evolution of this investment vehicle, where we are in the cycle, and the extent to which investors can generate returns for their portfolios from these income-producing strategies. Conducted by: James G. Clarke, Kansas University Endowment Association Discussants: Americo Cascella, Ares Management, LLC Michael J. Levitt, Kayne Anderson Capital Advisors, L.P. 3:30 pm Break 4:00 pm Investment Opportunities in Private Credit 6 Schedule Monday, September 11, 2017 4:45 pm The Role of Hedge Funds & the Best Opportunities In an environment of diminished returns, how are investors thinking about the use of hedge funds in their portfolios today? While many continue to rely on hedge funds for diversification, risk management and to deliver returns, over-crowdedness of trades and an increase in correlations are cause for concern. Looking ahead, what can investors expect from hedge funds? What are the hedge fund strategies, vehicles and structures where the best investments can be found? What are reasonable return expectations for performance and for fees? Should investors have exposure to U.S. and global long/short equity managers? Are there opportunities in non-directional hedge funds? Have investment teams increased defensive hedge fund exposure? This session will focus on trends impacting the hedge fund industry and will compare and contrast investment opportunities across the spectrum. Conducted by: Chris Giles, Financial Times Discussants: Barry Kaplan, National Railroad Retirement Investment Trust Samuel Norvell, The Annie E. Casey Foundation Reception and Membership Dinner immediately following at the Mandarin Oriental. All members are welcome to join us. The Membership Dinner is the perfect occasion to catch up with old friends and create valuable new connections. Dinner seating will begin at 6:30pm in the Oriental Ballroom. 5:30 pm Sessions Conclude Reception Immediately Following 6:30 pm Membership Dinner 7 Schedule Tuesday, September 12, 2017 7:00 am - 7:30 am 7:30 am - 8:45 am Closed-Door Sessions for Endowments & Foundations Only Breakfast & Peer Networking for Endowments & Foundations only Session A: Assessing Portfolio Risk Management Given the greater complexity and uncertainties related to financial markets, portfolio risk factors have become more difficult to quantify and manage. This facilitated discussion is intended to provide an opportunity for a practical exchange of ideas among peers about portfolio risks. Because risk tolerance, the definition of risk, and strategies to manage risk vary by institution, the focus of the discussion will be determined by the participants. The objective is for all attendees to be exposed to thought processes that will enable them to broaden their thinking as it relates to mitigating risk in their portfolios. Co-Facilitators: Kristin A. Agatone, Lehigh University James J. Floyd, Claremont McKenna College Session B: Relationships, Resilience and Results One of the most pressing questions endowment and foundation investment leaders are asking today is, “How do I improve the working relationships on my team, and with my board members?” These leaders recognize the profound impact that team dynamics can have on long-term performance and are committed to creating work environments that support smooth communications, clear decision-making and high levels of engagement. Unfortunately, most leaders have had little or no access to the tools and resources needed to accurately assess team health, identify gaps/issues and implement action plans to achieve their goals. This interactive session is designed to address that need through sharing insights about how the most successful leaders build high performing, collaborative and resilient teams. The discussion will also highlight three key actions that can be taken now to begin improving all of your relationships, leveraging the talent on your team and creating more trust with your boards. Facilitator: Jamie Ziegler, JZA Coaching Continental Breakfast for Members Sally M. Dungan, Tufts University Jeff Pippin, Pepperdine University Paula J. Volent, Bowdoin College 8:15 am 8:55 am Remarks from the Forum Chairmen 8 Schedule Tuesday, September 12, 2017 9:00 am Paula Volent in Conversation with Paul Tudor Jones II 9:45 am Outlook for Investment Opportunities in Europe Opening Interview: The Future of Asset Management: Insights & Observations An Interview with Paul Tudor Jones II, Tudor Investment Corporation In this interview, Paul Tudor Jones will share his insights on the current investment landscape. The interview will explore current trends which are impacting investors, including the trend toward quantitative investment strategies, the outlook for asset classes, equity market valuations, and the risks to institutional portfolios, among others. Conducted by: Paula J. Volent, Bowdoin College Interviewee: Paul Tudor Jones II, Tudor Investment Corporation Europe appears to be on a positive trajectory as the economy is growing and equity markets continue to rise. However, will the outlook for investments in Europe remain positive? Or are there potential headwinds on the horizon? For investors allocating assets to the region, what are the appropriate risk premiums? Our distinguished panelists will share their perspective on the current opportunity-set across asset classes, sectors, countries and investment strategies. How might endowments and foundations position their portfolios to capitalize on opportunities? The panel will explore the issues at play in the macro environment and share their insights on what the future has in store. Conducted by: Katty Kay, BBC World News America Discussants: Roger Bootle, Capital Economics Ltd. Stephen Kirk, Pelham Global Financials Ltd. Mas Siddiqui, Naya Capital Management UK Ltd. A Perspective on Financial Markets and Activist Investing An Interview with Daniel S. Loeb, Third Point, LLC In this interview, Mr. Loeb will share his perspective on a variety of investment topics related to activist investing, why the opportunity may be ripe for active engagement, and how activism has evolved. Mr. Loeb will also offer his insights on the current investment environment, the state of global equity markets, and the impact of data analytics on portfolio investing, among other subjects. Conducted by: Amy L. Chen, Smithsonian Institution Interviewee: Daniel S. Loeb, Third Point, LLC 10:45 am Break 11:15 am Amy Chen in Conversation with Daniel Loeb 12:00 pm Luncheon 9 Schedule Tuesday, September 12, 2017 1:00 pm Investing in Innovation: Opportunities in Technology and Genomics 1:45 pm Private Equity Investing: Risks & Opportunities Advances in innovation are taking place at an astounding pace, and are set to change the nature of the world we live in. These advances are fueling opportunities for investors willing to allocate capital, and may be the drivers of investment returns going forward. This session will explore developments and opportunities across the spectrum of life sciences and technology, including: the latest in gene therapy and other new drug development sustainability, innovation in biotechnology and therapeutics, robotics, satellites, and disruptive technologies, among others. Conducted by: Kathleen Vogelsang, Van Andel Institute Discussants: Eli Casdin, Casdin Capital, LLC Josh Stein, DFJ This session will focus on the state of private equity markets today from the perspective of endowment and foundation investors. What opportunities exist for private equity strategies to generate excess returns by adding value? While valuations appear at an all-time high, fundraising continues unabated. What is going on in the space today and what is the opportunity-set? What are the advantages and risks of allocating capital domestically and overseas to private equity funds? What analysis and assumptions should prudent investors undertake to ensure the investments they make will be successful? What regions look attractive and why? Is investing in emerging markets going to be different this time, especially given currency issues? Are appropriate risk premiums delivering high enough returns to justify the risk and illiquidity? Conducted by: André F. Perold, HighVista Strategies, LLC Discussants: Greg DeNinno, Howard Hughes Medical Institute Joshua B. Stern, Robert Wood Johnson Foundation Instead of losing competitiveness and jobs (as it has for several decades due to automation as well as competition from China and other emerging markets), forgotten areas of the American economy are undergoing a major transformation. Those who gave up on the rustbelts may be in for a surprise. Dozens of rustbelt cities are turning into “brainbelts” thanks to close collaboration between local universities, businesses looking for a new lease on life and startups. From Akron and Pittsburgh to Minneapolis and Portland, rundown factories and warehouses are becoming vibrant centers of entrepreneurial activity again, creating new investment opportunities well beyond Silicon Valley, Boston and Austin. The future competitive battle will not be on making things as cheap as possible but as smart as possible as we are on the cusp of a whole new wave of innovation. Speaker: Antoine W. van Agtmael, Formerly, Emerging Markets Management LLC; Foreign Policy Analytics 2:30 pm How Some Rustbelts Are Becoming the Smartest Places on Earth 10 Schedule Tuesday, September 12, 2017 3:15 pm Break 3:45 pm Evaluating Climate Risk from an Investment Perspective This discussion will focus on the role that investment strategy, policy, and corporate practice play in measuring and managing climate risks, including in facilitating the transition to a low-carbon economy. Corporations have begun to take steps to integrate sustainability into their business plans to promote sustainable economic growth and a cleaner environment around the world, and investors are increasingly taking these plans into account as they examine their portfolio risk. To what extent are these changes taking place in the corporate environment, how meaningful are the changes, and what impact will they have on investors? And how can climate change, which seems like a long-term issue, be translated into short-term investment decisions? Why should these discussions move out of the ESG/ SRI space into mainstream investment and corporate decision-making? The discussion will also focus on quantifying the economic and financial risks from unchecked climate change, and exploring the real investment opportunities in climate adaptation and mitigation. Conducted by: Kate Gordon, Paulson Institute Discussants: Robert Litterman, Kepos Capital, LP Robert E. Rubin, Council on Foreign Relations; Former Secretary of the U.S. Treasury Pressure changes everything: how our brain functions, diminishing our ability to think, deal with change and make decisions and it changes our behavior: causing us to have impact we don’t intend, decreasing our team’s level of engagement and discretionary effort. It doesn’t have to be this way. In this fascinating program, you will learn brain based insights into human behavior and concrete strategies to help you perform and lead more effectively when it matters most. Speaker: JP Pawliw-Fry, Emotional Intelligence (EQ) Thought Leader; Leadership, Performance And Change Expert This evening’s reception is a time for members to relax and reflect on the new ideas and fresh insights collected during our time together at this year’s Fall Forum. 4:30 pm Performing Under Pressure, The Science of Doing Your Best When It Matters Most 5:30 pm Sessions Conclude Reception Immediately Following 11 Schedule Wednesday, September 13, 2017 7:15 am - 7:45 am 7:45 am - 9:00 am Closed-Door Sessions for Endowments & Foundations Only Private Breakfast & Peer Networking for Endowments & Foundations Only Asset Allocation: What Is the Long-Term Solution to a Low-Return Environment? The current environment will likely be challenging for CIOs. While interest rates are anticipated to soon be on the rise, many investors believe the possibility of a sustained period of low-returns will characterize markets. If this is the case, how will investors respond in managing their investment portfolios? Do current approaches need to be reassessed to take a more defensive posture? How are institutions thinking about the construction of their portfolios including issues of diversification and sizing of commitments?This discussion will allow investment officers to exchange their ideas and approaches to the asset allocation dilemma. Co-Facilitators: Ellen J. Ellison, University of Illinois Foundation Jonathan L. Shear, The University of Utah Continental Breakfast for All Other Attendees Jeff Pippin, Pepperdine University Paula J. Volent, Bowdoin College Software is eating the world and venture capital companies like Uber, Airbnb, Roku, and Redfin are rapidly disrupting non-tech verticals. However, venture capital as an asset class still remains an enigma and many institutional investors ponder deeply over its mysteries – Is venture capital an asset class? Are all the returns concentrated with a few select firms? Should I invest in a manager not located on the coasts? Are we in bubble 2.0? How should I think about an emerging manager? Is fund of funds the way to invest in this asset class? This presentation will focus on and dispel some common myths and fallacies about venture capital. Speaker: Venky Ganesan, Menlo Ventures 8:30 am 9:10 am Remarks from the Forum Chairmen 9:15 am Opening Address: Venture Capital Myths and Fallacies 12 Schedule Wednesday, September 13, 2017 10:00 am Enhancing Returns through Factor-Based Investing In an environment of low-returns, many investors are seeking strategies to enhance their portfolios by generating higher returns, lowing risk or providing greater diversification. This discussion will explore how factor-based strategies can be used to complement a more traditionally designed investment program. This discussion will highlight a variety of approaches that can be taken to incorporate factored-based strategies to effectively achieve portfolio objectives. What are the risks and complexities of these products? How should costs be assessed? In this discussion industry practitioners will share their perspective on what investors need to know about factor-based strategies and their use in institutional portfolios. Conducted by: Shawn D. Wischmeier, Margaret A. Cargill Philanthropies Discussants: Adam Duncan, Cambridge Associates LLC Andrew Weisman, Windham Capital Management Globally, equity markets have trended strongly upward and many view them to be fully priced. Like house hunting in a highly desirable neighborhood, bargains are hard to come by. The speaker will discuss why it is so inherently challenging to achieve above average investment performance in almost any environment, including this one, but that some environments are easier than others. The presentation will also address why there is a reasonably meaningful and broad dislocation in markets today, leaving above average potential for alpha. He will approach the subject from a variety of perspectives, including US public markets vs. international developed markets vs. emerging public markets; value vs. growth; and where the best regions are to invest. Speaker: Graeme Forster, Orbis Investments Luncheon immediately following for all members (Grab n’ Go Lunches will be available) 11:00 am Break 11:30 am The Duration Dislocation: Risks and Opportunities in International Equity Markets 12:15 pm Forum Concludes 13