In late July, Stephen Blyth stepped down as head of Harvard Management Company; then things happened fast.

By mid-September, a hire seemed imminent and HMC was said to have winnowed the field down to just two: Narv Narvekar of Columbia and Amy C. Falls of Rockefeller University.

Mr. Narvekar, who got the job, was an obvious candidate, according to us as well as many others.  He had run a major Ivy endowment for a decade, consistently outperforming Harvard.  He was the right age and had the right credentials.  Everyone in our world of investment management knew and respected him.

See: https://www.charlesskorina.com/?p=3970

Ms. Falls was not quite so well known.  She had been chief investment officer at Rockefeller University in New York for five years, but that’s a smaller ($2 billion AUM), non-Ivy institution.

Rockefeller University has a small footprint on Manhattan’s upper East Side, and no undergraduates at all (although it does confer a few PhD degrees every year).  It’s primarily a world-class biomedical research center (including a long roster of Nobelists).  They do important work, but don’t have the cultural or investment heft of a Harvard or Yale.

But, on closer inspection, it was clear that Ms. Falls was not only an accomplished investment manager, but also an ambitious and formidable networker who was pre-vetted and well-regarded at Harvard.  Serendipitously, she had been tapped for a seat on the Harvard Management Company board last September.  Back then Mr. Blyth was still firmly in the saddle at HMC, ten months before the job suddenly fell open.

Paul J. Finnegan, who sits on the Corporation board as well as chairing HMC, welcomed her aboard last Fall, saying: “She joins at a particularly important time as we implement a new portfolio and organizational strategy.”  Clearly, Mr. Finnegan, who had himself just succeeded to the HMC chairmanship, had a hand in her appointment and regarded her as an ally in the refurbishment of the endowment.

Reliable sources tell us that Harvard tried to recruit Mr. Narvekar to succeed Mohammed El-Erian as endowment head.  But he declined then for personal reasons, and the job went to Jane Mendillo.

We think Harvard expected Mr. Narvekar to be more amenable this time around, which is why they were pretty confident they could fill the job quickly.  But, as battle-scarred head-hunters, we can testify that even “done deals” can inexplicably fall apart.  You always need a Plan B.  In this case, that was Amy Falls, who was an attractive candidate in her own right.

She had a Harvard degree, was a HMC board member, and had already been vetted by Mr. Finnegan.  And, in the diversity-sensitive world of Ivy politics, it didn’t hurt at all to have a woman publicly in the mix of candidates.

Coffee with Amy:

Ms. Falls graciously offered me a sitdown when I was in Manhattan last month, and I was eager find out what isn’t in her official bio.

She’s a direct and confident woman; and I enjoyed our wide-ranging conversation about her life, times, and profession.

Amy Falls is a doctor’s daughter who grew up in Lake Forest, Illinois, just outside Chicago.  She went east as a teenager to attend the elite Massachusetts prep school officially designated the Phillips Academy (but which is often referred to as “Phillips Andover,” or just “Andover.” (This is partly to distinguish it from the equally-tony Phillips Exeter, but partly we think just to mystify the unwashed.)  Andover is just a stone’s throw from Harvard, geographically, socially and academically; and is one of the “feeder” schools which furnish a disproportionate number of Harvard freshmen.

Ms. Falls, however, chose to major in history at Georgetown University, and only later circled back to Harvard for a graduate degree (MPP in International Development) at the Kennedy School of Government.  One of the interesting points on her resume, in fact, is that she has no degree in finance, unlike the ruck of her colleagues who boast name-brand MBAs.

She learned finance and investing the old-fashioned way, through on-the-job training at top investment banks.

Melville’s Ishmael boasted that “a whale-ship was my Harvard and my Yale College.”  This is not to say that a trainee at Morgan Stanley is equivalent to a deckhand toiling for Captain Ahab, but Ms. Falls clearly encountered some pretty rigorous mentoring.  Not only did she arrive without a finance degree, but she was a woman in a still male-dominant business.

As she told me: “If you’re a woman in finance, some of your mentors will be tough, some will be kind; but, inevitably, most will be men.  But I grew up playing poker with two brothers, so competing with men on a trading floor was not an entirely alien environment.”

One of the toughest and best of her Morgan Stanley mentors was Barton Biggs himself, a legendary investment strategist and research manager for thirty years before he left to found hedge fund Traxis Partners.  He took a personal interest in the junior employees, handing out individual assignments and grading their performance.

In an earlier stint at JP Morgan she also benefited from a female mentor in Eunice Reich Berman, a credit analyst who was a pioneer for Wall Street women in the 80s and 90s.

“Eunice was a tremendous role model for both men and women.  Unfortunately, she died of cancer in 1999 when she was only in her fifties and I still miss her.”

“I have also considered David Swensen to be a mentor-from-afar.  I never worked with him, but followed his career closely and learned from him, as has everyone in our field.  Our basic stance at RU is very Swensenian: we try to maintain a limited number of long-term, high-conviction relationships with highly-qualified external managers.”

As she worked her way up to Managing Director at Morgan Stanley, Ms. Falls was still connected to her prep school as a board member.  Around 2005 she found herself on a committee to consider whether to outsource the school’s sub-billion-dollar endowment.  She (and they) concluded that they should manage the money in-house.

The decision to set up an internal investment office (which was to be situated in Manhattan, not Massachusetts) was undoubtedly a rational one and supported by the full board.  But it certainly worked out well for Ms. Falls, who accepted the job of founding CIO. 

From 2007 to 2010 the Andover endowment produced top-quartile results.  Ms. Falls was recognized as a Rising Star by Institutional Investor in 2010.  And she and her team were nominated as Middle Market Endowment Manager of the Year.

That recognition was timely and helpful when she was recruited for the CIO position at Rockefeller University in 2011.

RU’s returns on Ms. Fall’s watch have been decent relative to peer endowments.

In FY2015 her (much smaller) fund earned 6.7 percent versus 5.8 at Harvard.  She also beat the average big (over $1 billion) endowment, which returned 4.3 percent.

Over five years, RU’s annualized returns have been about 10.1 percent versus 10.5 at Harvard.  They also came in slightly below the average big endowment, which returned 10.4 percent.

Rockefeller University’s board includes such investment eminences as Robert M. Bass and Henry R. Kravis (of private-equity giant KKR), with the latter currently serving as a Vice-Chair of the RU board.  These gentlemen, with their global networks, are probably helpful for connecting with those sought-after high-quality managers.

The highly accomplished and networked Ms. Falls still has plenty of running-room left in her career and may well have another shot at one of the top-tier endowments.  Meanwhile, in addition to her day job at RU and board duties at Harvard, she also serves on the boards of the Ford Foundation (since 2013) and of the Brearly School in New York.

Outside the office she also manages three daughters and a husband, the latter being Mr. Hartley Rogers, an ex Morgan Stanley banker and now chairman of Hamilton Lane Advisors, whom she married in 1999.  The couple have their own small charitable foundation serving education and the arts and she’s also involved in running the family’s Triple Chick Farm, a certified organic farm on Mount Desert Island off the coast of Maine.

See: http://triplechickfarm.com/

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Women endowment chief investment officers:

We know there are a lot of women running endowments, and have been for years.  But we had never stopped to do a head count.

So, after talking to Amy Falls, we decided to rummage through our databases to see just how many there are at the major endowments.

There are currently 95 big (over $1 billion AUM) endowments per the 2015 NACUBO-Commonfund Study (NCSE).  Of those 95 endowments, 19 of them, or 20 percent, are run by female chief investment officers.  Whether this is an adequate percentage we’ll leave to our readers to judge, but there’s no doubt that the female headcount is growing.  And it’s likely that women are better-represented in endowment investing than in other financial niches such as hedge funds, private equity, and investment banking.

In the year 2011 alone, when Ms. Falls started at Rockefeller University, no fewer than five women were hired as CIOs at major endowments.  Apart from Amy, they included Pamela Peedin at Dartmouth (who announced Monday that she will resign her position effective June 2017), Lisa Mazzacco at USC, Allison Thacker at Rice, and Lila Hunnewell at Boston University.

Two more female CIOs were hired this year by major endowments: Kathleen Jacobs at New York University, and Kristin Agatone at Lehigh.

Our chart below lists them all by seniority.

The doyenne of female CIOs is Paula Volent at Bowdoin College in Maine, with 16 years on the job.  Apart from endurance, she’s also one of the best, having trained under Dr. Swensen at Yale.  We have often made mention of her in our newsletter.

For instance, back in 2013 in our “Special Report on Midsize Endowments” we noted Ms. Volent was a high performer among the group.  Of course the endowment is now at $1.34bn and no longer midsize.

See: https://www.charlesskorina.com/?p=817

Mary Cahill at Emory and Janet Handley at Texas A&M are tied for second rank by seniority with 15 years each.

In total, these 19 women manage $74.6 billion AUM.

Endowment Women Chief Investment Officers

Rank by seniority	Name	Organization (Over $1bn AUM)	AUM $bn	Yrs in office
–	–	–	–	–
1	Paula Volent	Bowdoin College	$1.34	16
2	Mary Cahill	Emory University	$6.68	15
3	Janet Handley	Texas A&M ($1.4bn. See note below)	$10.48	15
4	Sally Dungan	Tufts University	$1.59	14
5	Mauricia Geissler	Amherst College	$2.19	13
6	Sally Staley	Case Western Reserve U	$1.78	10
7	Colette Chilton	Williams College	$1.78	10
8	Amy Marsh	U of Pittsburgh	$3.59	10
9	Kim Walker	Washington U St. Louis	$6.82	10
10	Deborah Kuenstler	Wellesey College	$1.85	8
11	Amy Falls	Rockefeller University	$1.99	5
12	Pamela Peedin	Dartmouth College	$4.66	5
13	Lisa Mazzocco	U Southern California	$4.71	5
14	Allison Thacker	Rice University	$5.56	5
15	Lila Hunnewell	Boston University	$1.64	5
16	Ellen Ellison	U of Illinois Fdn	$1.55	3
17	Julie Van Cleave	University of Wisconsin Fdn	$2.41	3
18	Kathleen Jacobs	New York University	$3.58	0
19	Kristin Agatone	Lehigh University	$1.21	0
–	–	Total AUM	$74.55	–

N.A. 1.: Ms Handley retires 12-31-16

N.A.2.: Texas A & M’s total endowment assets are spread across three different organizations that benefit Texas A&M and accumulate to $10.48bn.  The largest of these is UTIMCO, that manages the PUF (Permanent University Fund) which jointly benefits Texas A&M University and the University of Texas. (the Texas A&M portion of PUF assets is approximately $8bn.)

The Texas A&M endowment office manages assets in their LTIP of $1.4bn as of 6/30/2016 and $1.45bn as of 9/30/2016.

The third slice is the System Endowment Fund, managed by the Texas A&M System office.  That fund (SEF) had asset of about $1bn as of 8/31/2016.  Those funds are mostly designated to benefit Texas A&M University, but also contain assets that are designated for other universities in the Texas A&M System.  The money in the System Endowment fund is managed by (Treasury) staff in the Texas A&M System office. They answer to the chancellor and ultimately to the Board of Regents.