Mary Cahill is the chief investment officer of Emory University, overseeing a $7 billion investments portfolio of all endowment, trust, operating and employee benefit funds of the university and related medical facilities. Prior to joining Emory, Cahill was the deputy chief investment officer of Xerox Corporation and ran the Xerox Canada pension plan. Cahill has 30 years of investment experience with prior positions in the Virginia Retirement System, SmithKline, BellSouth and Merck pension plans. Cahill has an MBA specializing in finance from St. John’s University.
Ms. Cahill was recently named on Trusted Insight’s ranked list of Top 30 Women Chief Investment Officers. She graciously spoke with us on April 11, 2016. The following interview has been condensed and edited for clarity.
Trusted Insight: Finance is traditionally a male-dominated industry. Many people would assume that a woman is bound to face more difficulties choosing this career path. As a successful female executive in this business for more than 30 years, what are your observations on this?
Mary Cahill: Well, over the years I think I've met with fewer, not more, women in the industry. When I graduated from college, I believed that times had changed and women would move into leadership roles in finance. Expectations were high, but the investing landscape changed. The rise of hedge funds with male-dominated, aggressive cultures, shorter-term horizons and, to some extent, greed led to less inclusion of women, which is too bad. I am an optimist, and I would not be where I am today without the help of men and the willingness of some to recognize the value of talent and contributions to returns that diversity and inclusion can provide.
Trusted Insight: What about the circle of longer-term investment entities, like endowments? Would there be more women in those organizations than in hedge funds?
Mary Cahill: Perhaps, but even there I think there are less than there were at one time. I think that the biggest challenge for our industry is to really take actionable steps toward inclusion. I think that both men and women need to understand how they personally can affect change. I think there are more women in endowment management perhaps than on Wall Street. But still, when you look at the very high level, the CIO level, you see more men.
Trusted Insight: On an individual level, what would you say are some of the unique challenges a woman would face during her career in investment?
Mary Cahill: I think there is still a bit of a club, and that can be challenging. I think women need to be vocal. If I were to give advice, I'd say let your organization know what you're contributing, what your aspirations are and the work that you want to be involved in to advance your career. Also, be straightforward about compensation.
Trusted Insight: You previously worked in government and corporate pension funds. How is managing an endowment different from other types of investments?
Mary Cahill: I see two significant differences. One is governance. The investment committees and boards that provide oversights for endowments are typically different than those of public and private pension plans. Endowments’ committees and boards include volunteers and trustees that have loyalty and devotion to the university. Some of them have strong investment experience or high-level business/entrepreneurial experience. I think the other significant difference is the time frame. Endowments are truly longer-term investors than other entities.
Trusted Insight: Tell me about the history of the Emory endowment. How has the portfolio changed since you became CIO?
Mary Cahill: When I joined Emory (in 2001), the vast majority of the portfolio was held in a single stock with small allocations to alternative investments. It was managed by a small group under the chief operating officer of the university. Over the years, I've built an investment office from a three-people staff to a team of 25 professionals and a diversified portfolio that is global and includes significant non-traditional investments. I added resources to manage risk, compliance, trading and increasingly complex investments.
Trusted Insight: 25 people seems to be on the larger end of investment teams. How do you make investment decisions as a team?
Mary Cahill: I don't think it's all that large given the size of our assets. We manage not only the endowment but the defined benefit plan, defined contribution plan and all university assets. Having said that, we have almost a dozen people on the investing side, which includes a public team and a private team, although they work very much together on investing. Then we have a risk management and asset allocation team. We have an operations team that is responsible for reporting, compliance, trade execution and accounting. That's about eight people. The rest are support staff.
Trusted Insight: What distinguishes Emory from your peer institutions?
Mary Cahill: Depends on how you define peers. We have a total asset under management of $6-to-$6.5 billion. So we are at a nice place to be able to invest in smaller boutique funds. Also we are large enough that we have an investment team to find those managers. In many universities, it's not until you get to $1 billion dollars, maybe $2 billion, before you start to see investment professionals in house and of enough size to be able to find those types of investments. Also, on the illiquid side, buyouts, venture capital and hedge funds take a lot of work. You need people who are able to do that and size. We're not too large or too small.
Trusted Insight: Emory endowments did exceptionally well in 2014 with high double-digit growth. What did you do right in 2014?
Mary Cahill: We had strong returns in public and private equities. That's really what drove up performance in that particular year. We do partner with what we believe are best-in-class investment managers. We have a highly skilled team internally. I think that just gave us a really good year.
Trusted Insight: By contrast, 2015 was a pretty difficult year for many endowments.
Mary Cahill: Yes, it was a difficult year for us, mainly due to investments in energy and the J-curve effect on private equity investments as we increased allocations.
Trusted Insight: What is your strategy to mitigate risks during industry-wide downturns like energy and natural resources in 2015?
Mary Cahill: We have several defenses with diversification being number one. We always have some portion of the portfolio and assets that we expect to outperform in down markets. We consider the down side when we're placing funds. We model liquidity so that we're in a position to maintain the course when markets decline and don't have to sell assets. In addition, we have dry powder to invest when assets are cheap. Finally, our internal risk management provides various lens to the risk exposures in the portfolio.
Trusted Insight: Looking forward, where do you see the most appealing opportunities for endowments in today's market?
Mary Cahill: We are looking at the changing financial regulations and the impact on markets from banks stepping away from some of their historical business lines. We are looking at both public credit and less liquid credit. I believe that equity returns will be increasingly limited at this point.
Trusted Insight: You mentioned you have best-in-class managers. When you hire external managers, what qualities do you think are essential?
Mary Cahill: We're seeking strong talent with a competitive advantage. We prefer managers that are located in their markets. For example, if we are investing in India, we prefer the manager be located in India. We tend to invest in more boutiquey type managers. When we invest with larger managers, we are looking for managers with a global reach and array of offerings that can supplement our own allocation research.
Trusted Insight: Is it fair to say that you prefer specialists over generalists?
Mary Cahill: Yes. Although we do have both in the portfolio. We have more on the specialist side.
Trusted Insight: What career advice would you give to the more junior investors in the industry, especially women?
Mary Cahill: My advice again is be vocal. This is a great industry and there should be more women in investment management. Networking is important, especially in the very early part of one’s career or during times of volatility.
People should be themselves, not try to be someone else. They need to look at themselves and think, “Okay, is there anything that's holding me back? Am I willing to speak up or to sit at the table or to ask questions or do I feel that I can't do that because I'm the only woman in the room? I think they should be aware that nothing is blocking them from being themselves.
Learn more about the Top 30 Women Chief Investment Officers here.
Ms. Cahill was recently named on Trusted Insight’s ranked list of Top 30 Women Chief Investment Officers. She graciously spoke with us on April 11, 2016. The following interview has been condensed and edited for clarity.
Trusted Insight: Finance is traditionally a male-dominated industry. Many people would assume that a woman is bound to face more difficulties choosing this career path. As a successful female executive in this business for more than 30 years, what are your observations on this?
Mary Cahill: Well, over the years I think I've met with fewer, not more, women in the industry. When I graduated from college, I believed that times had changed and women would move into leadership roles in finance. Expectations were high, but the investing landscape changed. The rise of hedge funds with male-dominated, aggressive cultures, shorter-term horizons and, to some extent, greed led to less inclusion of women, which is too bad. I am an optimist, and I would not be where I am today without the help of men and the willingness of some to recognize the value of talent and contributions to returns that diversity and inclusion can provide.
Trusted Insight: What about the circle of longer-term investment entities, like endowments? Would there be more women in those organizations than in hedge funds?
Mary Cahill: Perhaps, but even there I think there are less than there were at one time. I think that the biggest challenge for our industry is to really take actionable steps toward inclusion. I think that both men and women need to understand how they personally can affect change. I think there are more women in endowment management perhaps than on Wall Street. But still, when you look at the very high level, the CIO level, you see more men.
Trusted Insight: On an individual level, what would you say are some of the unique challenges a woman would face during her career in investment?
Mary Cahill: I think there is still a bit of a club, and that can be challenging. I think women need to be vocal. If I were to give advice, I'd say let your organization know what you're contributing, what your aspirations are and the work that you want to be involved in to advance your career. Also, be straightforward about compensation.
Trusted Insight: You previously worked in government and corporate pension funds. How is managing an endowment different from other types of investments?
Mary Cahill: I see two significant differences. One is governance. The investment committees and boards that provide oversights for endowments are typically different than those of public and private pension plans. Endowments’ committees and boards include volunteers and trustees that have loyalty and devotion to the university. Some of them have strong investment experience or high-level business/entrepreneurial experience. I think the other significant difference is the time frame. Endowments are truly longer-term investors than other entities.
Trusted Insight: Tell me about the history of the Emory endowment. How has the portfolio changed since you became CIO?
Mary Cahill: When I joined Emory (in 2001), the vast majority of the portfolio was held in a single stock with small allocations to alternative investments. It was managed by a small group under the chief operating officer of the university. Over the years, I've built an investment office from a three-people staff to a team of 25 professionals and a diversified portfolio that is global and includes significant non-traditional investments. I added resources to manage risk, compliance, trading and increasingly complex investments.
Trusted Insight: 25 people seems to be on the larger end of investment teams. How do you make investment decisions as a team?
Mary Cahill: I don't think it's all that large given the size of our assets. We manage not only the endowment but the defined benefit plan, defined contribution plan and all university assets. Having said that, we have almost a dozen people on the investing side, which includes a public team and a private team, although they work very much together on investing. Then we have a risk management and asset allocation team. We have an operations team that is responsible for reporting, compliance, trade execution and accounting. That's about eight people. The rest are support staff.
Trusted Insight: What distinguishes Emory from your peer institutions?
Mary Cahill: Depends on how you define peers. We have a total asset under management of $6-to-$6.5 billion. So we are at a nice place to be able to invest in smaller boutique funds. Also we are large enough that we have an investment team to find those managers. In many universities, it's not until you get to $1 billion dollars, maybe $2 billion, before you start to see investment professionals in house and of enough size to be able to find those types of investments. Also, on the illiquid side, buyouts, venture capital and hedge funds take a lot of work. You need people who are able to do that and size. We're not too large or too small.
Trusted Insight: Emory endowments did exceptionally well in 2014 with high double-digit growth. What did you do right in 2014?
Mary Cahill: We had strong returns in public and private equities. That's really what drove up performance in that particular year. We do partner with what we believe are best-in-class investment managers. We have a highly skilled team internally. I think that just gave us a really good year.
Trusted Insight: By contrast, 2015 was a pretty difficult year for many endowments.
Mary Cahill: Yes, it was a difficult year for us, mainly due to investments in energy and the J-curve effect on private equity investments as we increased allocations.
Trusted Insight: What is your strategy to mitigate risks during industry-wide downturns like energy and natural resources in 2015?
Mary Cahill: We have several defenses with diversification being number one. We always have some portion of the portfolio and assets that we expect to outperform in down markets. We consider the down side when we're placing funds. We model liquidity so that we're in a position to maintain the course when markets decline and don't have to sell assets. In addition, we have dry powder to invest when assets are cheap. Finally, our internal risk management provides various lens to the risk exposures in the portfolio.
Trusted Insight: Looking forward, where do you see the most appealing opportunities for endowments in today's market?
Mary Cahill: We are looking at the changing financial regulations and the impact on markets from banks stepping away from some of their historical business lines. We are looking at both public credit and less liquid credit. I believe that equity returns will be increasingly limited at this point.
Trusted Insight: You mentioned you have best-in-class managers. When you hire external managers, what qualities do you think are essential?
Mary Cahill: We're seeking strong talent with a competitive advantage. We prefer managers that are located in their markets. For example, if we are investing in India, we prefer the manager be located in India. We tend to invest in more boutiquey type managers. When we invest with larger managers, we are looking for managers with a global reach and array of offerings that can supplement our own allocation research.
Trusted Insight: Is it fair to say that you prefer specialists over generalists?
Mary Cahill: Yes. Although we do have both in the portfolio. We have more on the specialist side.
Trusted Insight: What career advice would you give to the more junior investors in the industry, especially women?
Mary Cahill: My advice again is be vocal. This is a great industry and there should be more women in investment management. Networking is important, especially in the very early part of one’s career or during times of volatility.
People should be themselves, not try to be someone else. They need to look at themselves and think, “Okay, is there anything that's holding me back? Am I willing to speak up or to sit at the table or to ask questions or do I feel that I can't do that because I'm the only woman in the room? I think they should be aware that nothing is blocking them from being themselves.
Learn more about the Top 30 Women Chief Investment Officers here.