Interviewee: Luisa Vazquez Usabiaga

Interviewer: Gabriel Levi Carneiro Ramos

Transcript:

Okay, so you were telling me that like while you were working at BU you guys had an endowment, so that's basically like kind of wealth management for the school? Yeah, it's kind of wealth management, like if you want I can say what it's meant to do. Yeah, sure. Yeah, so the endowment basically it has two purposes, to cover the expenses of the university now and also for the future.

So since the endowment it's pretty new, it's like they did like a structural change in 2008, it doesn't fund a lot of the university activities, so it's I think maybe 10 or 15 percent and the rest is meant to keep growing the endowment until it reaches a good size. When I left it was in 3.5 billion, this was last year, so probably already like grew by a bit, but I'm not sure about it. And then like so for like the endowment money, does that come like from any like grant support system or basically just like private money from like that the university has that they generated themselves or? Yeah, they just started accepting donations, but before they didn't accept any donations.

Well, more like BU didn't have a program to reach out to alumni for donations, so it was a lot that university, it was like 19 something, they put some money aside to create the endowment and they took that to do it, so from there on it hasn't, like money from the university doesn't really go to the endowment, it's more self-sustained. No, yeah, it makes sense. And then like so basically and then while you were working there, were you, how can I say that, like how do you guys manage the money and basically like report back saying that it's been using like wisely and did you work into any of like in any of these type of processes? Because the tool that we're trying to design is, it is like for grants people, like grants in general, but it can basically be applied to other places, which is like just having been able to pull like public data like more easily to just like any public data that relates to the company, like automating that and also automating processes of basically managerial processes and this kind of thing, so I was just wondering.

Yeah, so they have a couple, like their portfolio breaks down in different sections, some of them are of course like public companies, like stocks and options and but one big part is private equity, so private companies and basically they invested like in the US, also like abroad, but how they did it, how the process was going is basically the managers from different hedge funds came and they like presented how they're allocating their money, their assets, etc. and then they evaluated, they see how it fitted with the portfolio, so they run correlations because the purpose of the portfolio is to have it being well-rounded, so you have two managers that basically do the same and correlate the same, it's not ideal because in case of a bad scenario, the portfolio is going to lose a lot of money, so they tried to see that each manager like had different exposure to the market, so if the market was down, this manager would be up, if the market was up, the other manager would be up, so in order to hedge the risk and so after they liked the manager, they run these correlations and then they do due diligence on the manager just to check that it's actually real, it's not fake and they invested in it, so I was working primarily in that, they also, I think for a lot of their investments, they're not open to the public because basically like the public cannot invest in these private equity firms because it requires, like they just accept institutional investors or like people with a lot of money, so it's hard for the public to use it, I mean for their public stuff, stocks and stuff like that, I think they primarily do it also to hedge funds and maybe they own some of them, they also have some exposure obviously in TBLs, like more secure assets, commodities. So you were working more like in the due diligence part of it, right? Yeah, just like not in a due diligence, more like searching up funds, like in different, when I worked there, they were taking, they were expanding to like Asia, so they were trying to become more global and so I was meeting these managers, like summarizing what they do and then I ran some correlations with other, like how would this manager fit in the portfolio.

And like what kind of like search tools do you normally use for that? I don't remember the name but there's two websites, you need to pay to access them, I like, I'm sorry, I don't really remember the name, but like basically these websites, you just type up the font and it gives you information, like where are they established, from which year on, like if you need, I can ask them. No, no, no problem, but like and how much time would you normally spend, like just like doing searching and actually finding, like funds or I don't know, investments in general with, like that you actually, like they actually correlated with what you guys were searching. I think it took them a while, like three to four months, five months, because they needed to meet a lot of these managers to make sure that everything was right, then correlations, then the due diligence, so it took them a while, because first of all, it's like getting the exposure that takes a lot of time, so like meeting as much managers as they can, they come into the office, this takes, I don't know, like a month, two months to meet all of them, then you select, so I would say yeah.

And what, so what would be kind of like the process of doing all of that, like the entire workflow, so like doing the search, finding the fund, contacting the manager. First, it would be choosing what you want, so I don't know, you already have a lot of U.S. exposure and you want to diversify, and they first choose like Asia, GEMS as a region, so like emerging countries in Asia, then they, I mean there's a lot of investors that came to them, and also they like look for some, basically a bit through contacts, so through other endowments, or maybe like even searching up like in the website, not in the website, but in this page, to see which were based on Asia, and then like the managers came, they talk to them, they saw their allocation methods, etc., and then after all of this, they run the correlations. Makes sense, and that, and like all like data and documentation, how do you guys normally deal with that? Data and documentation, they have, I think like memos, like the managers, what they do, etc., they have like these PowerPoint presentations, which condense all of these managers, their specialties, like when have they been active, etc., yeah.

And like how much, okay, okay, and how do you guys normally like get this manager's data, and like how is like the search process for that normally, for getting this like memos, index? Yeah, the manager sends them to them, because this is private information, so you cannot like go and search their performance, they, because they're like closed, so they need to send them to you, and it's like strictly confidential. And then you like analyze it, and everything. Yeah.

Makes sense, makes sense. Yeah, so yeah, this was like all the questions that I had, and yeah, that's, that was about it, and then we also have like a Google Doc that we're trying to make everyone like feel, it doesn't really relate to you, but like just feel it like, and whatever question doesn't relate, just put NA or something, you know, but it's more like just to track everyone we're interviewing. Okay, yeah, that's cool, yeah.