Julia Mord joined Tulane University’s Investment Office in 2014, a banner year for the 180-year-old research institution during which (as of June 30th) the $1.22 billion endowment added $13.9 million of value to its benchmark. From 2006 to 2014, Julia was one of three people managing a multi-asset class portfolio for AI International, a family office. She began her career at Ernst & Young as a Business Analyst. Ms. Mord holds a BA in economics from the University of Chicago, an MBA from the Wharton School of Business at the University of Pennsylvania and is also a Chartered Alternative Investments Analyst (CAIA). Editor’s Note: Ms. Mord is the first of the “Top 30 Most Influential Women in University Endowment Investing” we’ve interviewed who found her current position through Trusted Insight’s curated list of job opportunities.
Ms. Mord took the time to speak with Trusted Insight on September 10 from the University’s Investment Office which, surprisingly, is located in Darien, Connecticut. The following interview has been edited and condensed.
Trusted Insight: Were you surprised to find that you’ve been named one of the Top 30 Most Influential Women in University Endowment Investing?
Julia Mord: I was; I was flattered.
Trusted Insight: Women appear to be better represented in Endowments and Foundations than in other areas of finance. Do you have any ideas about why you think that might be?
Julia Mord: I think a lot of it is the long-term nature of endowments. We don’t have a liability schedule other than the payout to the University. That enables us to think longer-term. I think women tend to be more long-term minded, which is consistent with the goals of an endowment: what decision can I make today that will have a long-term positive effect on the university.
To that end, I also think women shy away from more short-term risk, although that may be based on more anecdotal evidence than anything substantive. I recently attended an industry women’s forum in NYC and the topic of there being so few women in hedge funds became a focus. One of the reasons cited was that hedge funds involve a lot of short-term high stress and expectation; if you don’t make it you’re out. There also appeared to be few opportunities for women to be mentored and encouraged from the initial recruiting process through the portfolio management levels. Of course there a number of very successful women hedge fund managers globally, but they represent such a small minority within the total pool of managers. The hope is that will begin to change.
I think women have good intuition and good long-term judgment. So being benchmarked to long-term metrics is something women are more comfortable being measured against. Endowment returns are [calculated] on a 3-, 5-, and 10-year basis, so it’s a different sort of risk taking.
Another reason there may be more women in Endowments and Foundations vs. in other sectors of finance & investing, is perhaps a greater personal alignment with the university or foundation’s mission. Women have a propensity to participate in civic and charitable activities. To that end an investment leadership role within an E&F combines a passion for investing with aspirations to serve a charitable mission. It’s a unique combination that likely appeals to women.
Trusted Insight: Have you been able to identify any changes or trends in endowment investing since you’ve been at Tulane?
Julia Mord: I’ve only been here 1 ½ years but I can tell you a little about what’s changing at Tulane. We’ve become more equity-centric over the last 5 years. 35% of our allocation is to global equity; 15% is to private equity and we’re looking to grow that to 20%. Even in a hedge fund pool we need some equity beta, so there’s a long/short sleeve. However, we are mindful of making sure the portfolio has the optimal level of diversification to offset a number of risk factors. We also have cash that we plan to deploy if there are dislocations in the market, similar to those that were capitalized on in 2008 and 2011. Holding ample cash allows us to be opportunistic.
Also, we’re more concentrated; both at the manager level and at the security level. We have 15 hedge fund managers and 15 global equity managers. Within our global equity portfolio we try to select managers that are willing to concentrate; we don’t want “closet indexers”. If each manager has 10-20 positions with minimal overlap, a group of 10 concentrated managers creates ample diversification.
Trusted Insight: Why is manager concentration important?
Julia Mord: There are seven of us on the investment side; each individual on the team can only have a certain number of relationships; there’s a sweet spot in order to cultivate good relationships. If there were more managers we wouldn’t be able to follow the funds as well. We also find concentration generates stronger returns over time.
Trusted Insight: What do you see as the biggest challenge to endowment investing right now?
Julia Mord: University endowments are faced with requirements to generate aggregate returns of at least their annual payout plus CPI (Consumer Price Index), which equates to approximately 7-8% annually. Given zero-interest rate policies across developed markets, rich valuations in US equity markets, and slowing growth in China and its implication on global commodity producing nations, endowments are faced with a growing challenge to meet those targets. Tulane’s returns have been top quartile on a 3-, 5- and 10-year basis, largely driven by a sizable allocation to global equities. We continue to believe the best return potential remains in equities and have relied on a unique portfolio of concentrated managers to drive returns. However, given the challenges described, we remain cautious on the macroeconomic environment and ensuing market volatility. To that end, we rely on other aspects of the portfolio, including our marketable alternatives sleeve, comprising a diversified pool of hedge fund managers and strategies to mitigate risk within the broader endowment portfolio.
Trusted Insight: It’s unusual for a University located in Louisiana to have its investment office in Connecticut. Can you tell me how that happened?
Julia Mord: In the aftermath of Katrina (2005) we were able to obtain temporary space in Connecticut. Once the office moved, the committee and university administration realized that the office did not need to be connected to the campus to be effective in its mission. [Being in Connecticut] gives us better access to managers, conferences, contacts. Most of my colleagues are Tulane alums, so would love to be closer to campus, but being up here helps us maintain some level of independence. That being said, we go down to the campus quite frequently.
Trusted Insight: How did Katrina impact the endowment? I imagine the campus sustained a lot of damage.
Julia Mord: The president at the time, Scott Cowen (Tulane’s 14th president from 1998-2014), decided not to use the endowment to plug the gaps created by Katrina and this allowed the endowment to remain robust. It was a difficult and controversial decision at the time.
Trusted Insight: Which of your accomplishments are you the most proud of?
Julia Mord: I’m very proud that I have an exciting, rewarding career while being a mother of two boys (ages 6 and 2). I apologize if this seems trite but it takes a lot of effort to keep it all together. My husband has a demanding career too and we have family to help us. I’m glad that I have both worlds. I think it’s really good for my kids too. I try to explain to them what I do and why and what gets me excited about going to work every day. Of course they don’t understand most of what I say but I look forward to continuing those conversations.
Trusted Insight: What is a passion of yours that is not widely known?
Julia Mord: Wilderness backpacking and camping. The ability to leave civilization even for just a few days and become immersed with my natural surroundings, provides a level of catharsis that is difficult to achieve in my daily routine. Of course, now that I have two small boys, the passion has evolved into weekend camping with a chaotic element thrown in. That catharsis is on pause for now.
To learn more about the powerful females of institutional investing, check out Trusted Insight's list of The Top 30 Most Influential Women In University Endowment Investing.