We Believe Everyone Deserves
an Endowment

When we discussed the idea in 2023, I wasn't actually sure that we should start it.

As an institutional investor, I've long known that individuals and institutions invest in vastly different ways. On a professional level, I could build resilient, diversified, high performing portfolios for my institutions, but on a personal level, I couldn't invest in them myself. As individual retail investors, we face a number of structural barriers, not least of which is just the minimum investment amounts required by any one alternative investment (minimum investments are often $5 million and up), much less a portfolio of them.

This was such an ingrained reality and commonly accepted status quo, that I couldn't picture bridging the gap. Not until my now co-founders asked a very simple question, and prompted me to think hard about the answer – why shouldn't I invest like my institutions? As a sophisticated institutional investor, I know well how to construct a portfolio, how to manage liquidity, how to evaluate investment opportunities, how to diligence investment managers – why couldn't I overcome the barriers to replicate for my own personal portfolio the work I was doing on behalf of my institutions?

Explicitly asking the question, and then detail by detail listing the issues that needed to be solved – that has been the guidepost for Ivy Invest. We have been working non-stop to solve:

• The structural barriers: regulatory and legal, including the basic but difficult question of what kind of vehicle can even take in retail capital and still allow for institutional style investing
• The distribution barriers: how could we get this into the hands of everyday investors who maybe don't have financial advisers or "connections"
• The access barriers: how do we translate my knowledge and network of exceptional fund managers across asset classes into investments here at Ivy Invest

In short, I started Ivy Invest to build the product that I personally have always wanted (even if I didn't initially think it was possible) – and that's exactly what we've done.

Naturally, my investment philosophy reflects the core elements of an endowment-style approach. These include:

Long-term Investment Horizon
I've seen over multiple market cycles how a long-term investment perspective promotes better investment decisions and limits knee-jerk reactions when markets are bumpy. Having a long time horizon also enables investors (with access) to consider less liquid investment opportunities, including private equity and venture capital. These opportunities in turn can provide higher returns than short-term, daily liquidity investments. And of course, a long-term approach allows investors to take advantage of the enormous power of compounding growth.

Equity Focus
As an asset class, equities (which includes public stocks and private equity/venture capital) have historically produced the highest returns over long periods of time. As a long-term investor, it's important to maintain a large and consistent allocation to public and private equities, which together capture the growth and return potential of the broader economy.

Diversification
The investment universe is far broader than just traditional stocks (equities) and bonds. Some non-traditional, alternative asset classes such as private equity and venture capital can offer higher returns than public equities. Other alternative asset classes such as private credit and real assets can offer returns that have low or no correlation to equities and provide downside protection during market downturns. Taken together, I've seen repeatedly how broadly allocated portfolios that include traditional and alternative assets can deliver better risk-adjusted returns, and over the long-term, better absolute returns.

Risk Management
In many ways, I think of risk management as a default mindset as much as a set of rules or principles. That said, diversification, both across and within asset classes, is a key component. Risk management also includes evaluating risk-adjusted returns across investments, managing portfolio liquidity, avoiding excess leverage, and preparing for different economic and market scenarios.

Manager Selection
I think this piece of the endowment-style approach might be the least familiar to individual investors. Endowments and foundations aren't typically making individual investments at the company or security level. Endowment-style portfolios invest in other funds through a process known as manager selection. This process is the key to how endowments and foundations are able to invest in a wide range of strategies and asset classes.

Let's consider a small subset of potential strategies - 1) investing in early stage biotech; 2) developing commercial real estate; and 3) lending to private companies1. I don't think it would be a surprise to anyone to hear that each of these strategies requires a special set of skills and expertise. Each strategy involves a different network of stakeholders. And it often takes years to develop the skills, expertise, and networks to pursue these strategies successfully. Now consider the hundreds of strategies that exist across various asset classes, and you can see why manager selection is so important.

I didn't grow up with ambitions to be a professional investor. As a kid, I didn't even know it existed as a career path. I grew up in a smaller city in Pennsylvania, and finance just wasn't on my radar.

That all changed during my time at Columbia, where particularly in my college days, the finance industry dominated a lot of on-campus recruiting and student career conversations. It was eye-opening for me, and I felt very drawn in. I've always been analytically inclined, and finance offered a lucrative career path where I could lean into my natural strengths.

As I was considering job offers, instead of a more traditional banking or consulting role, I made the choice to join something called an endowment investment office at the Metropolitan Museum of Art. Back then, professional, internally run endowment and foundation investment offices were far less common. It was an even more opaque part of the market than it is today. But I chose the role at the Met Museum because it sounded really different and interesting, and that proved to be the case! It led me down this wonderful career path of being a professional investor, or more specifically, an institutional allocator.

And it's hard to describe how much the broader investment world opens up to you as an institutional allocator. From my early days at the Met Museum to now, over 18 years later, I've had the great fortune to meet, learn from, and invest in many of the most talented investment managers in this business across every asset class.