Rice University - Message Points

1. You primarily allocate via external, active managers in a manager-of-managers framework.

As an entrepreneurial, owner-managed hedge fund, we fit your preference for third-party, high-conviction active managers and can be evaluated alongside your existing roster.

Evidence

“Moreover, the endowment is primarily invested through third-party investment managers and funds.” “The endowment is actively managed by the RMC, which employs a “manager of managers” approach for most... While the RMC does manage some directly held assets... we primarily utilize external managers (approximately 100) to invest globally across all asset classes.”

2. You maintain a meaningful hedge fund/hedged strategies allocation and want managers that ‘make money differently’ and provide ballast in drawdowns.

Our low-correlation, risk-managed return profile is designed to diversify equity risk and hold up in stress, aligning with your hedged/differentiated sleeve.

Evidence

“Hedge - - - 1,370,300 1,370,300” “Said simply, this allocation identifies strategies that “make money differently” than the rest of the portfolio.” “Notably, during significant downturns in equity markets... hedged and differentiated strategies outperformed equity markets by a large margin, providing ballast to Rice’s portfolio...”

3. You invest globally with substantial non-U.S. exposure and benchmark against global indices.

Our global mandate with emerging markets capability can complement your international exposure and be assessed versus your ACWI-linked benchmarks.

Evidence

“We primarily utilize external investment managers, and invest globally across all asset classes.” “Rice University Policy Portfolio 35% US Stocks / 35% Int'l Stocks / 30% Bonds” “Over the long term, Rice has been able to outperform a passive index of 80% global stocks (MSCI ACWI index – large and mid-cap stocks from 23 developed market countries and 24 emerging market countries) and 20% US bonds...”

4. You’ve highlighted interest in emerging markets opportunities.

Our team’s EM expertise and on-the-ground research can target the opportunity set you’ve flagged within EM.

Evidence

“Our investment team is starting to see some exciting opportunities emerge particularly within emerging markets and the natural resources sector.”

5. You concentrate capital with a select group of long-tenured public equity partners and make meaningful allocations to top relationships.

As a concentrated, best-ideas manager with a long track record, we aim to be one of the few high-conviction partners to whom you allocate at scale.

Evidence

“The endowment’s 15 largest partners account for $2.5 billion or 41% of the total investments as of June 30, 2020.” “RMC prioritizes longevity in its manager relationships, with seven of the 11 public equity partners included in the portfolio for over a decade.”

6. You seek long-term, world-class managers with proven track records, disciplined processes, and a clear investment edge.

Our owner-managed firm has a long, audited track record and a disciplined, valuation-sensitive process designed to compound capital over full cycles.

Evidence

“These partners have high quality, long-term track records, defined portfolio construction processes and investment expertise.” “Rice desires managers with exceptional investment skills, a proven investment track record, a strong investment team and a clear and disciplined investment philosophy.”

7. You favor equity-oriented, value/valuation-sensitive, fee-aware managers expected to outperform passive net of fees over the long term.

Our concentrated, high-conviction approach is valuation-driven and designed to generate durable alpha net of fees versus global equity benchmarks.

Evidence

“To support the in-perpetuity nature of the endowment, we believe a long-term portfolio should be: equity-oriented, diversified, invested in real assets..., value-focused and valuation-sensitive, fee-sensitive and partnered with managers who have a real investment edge.” “Over the long term, Rice expects that collectively and net of fees, these managers will earn the endowment a return in excess of the return on passive investments in stock and bond funds.”