From One-Woman Team To A Global Portfolio | Exclusive Q&A With Kathy Vogelsang, CIO Of Van Andel Institute
Kathy Vogelsang is the chief investment officer at Van Andel Institute, a nonprofit medical research center based in Grand Rapids, Michigan. Vogelsang joined the institute in 2005 as its inaugural chief investment officer for the organization's $1.3 billion of endowment assets. Previously, Vogelsang was vice president and senior portfolio manager at Fifth Third Bank and an investment manager at JVA Enterprises, a single-family office founded by Amway Corp. co-founder Jay Van Andel and his family.
Vogelsang holds a BBA in finance and an MBA from Grand Valley State University. She is a Chartered Financial Analyst.
Ms. Vogelsang was recently named on Trusted Insight’s 2017 Top 30 Women Chief Investment Officers.
Trusted Insight: How does working at a single-family office (JVA Enterprises) differ from working at an endowment?
Kathy Vogelsang: It’s pretty similar with one exception: working in a family office, as opposed to a tax-exempt institution, gives you a little bit more flexibility. You don't have to worry about the tax implications of what you're investing in. Also, an endowment runs in perpetuity, so you’d take a long-term view on your investments.
Trusted Insight: What is your process of setting up the Van Andel’s investment program? Did you structure the endowment with any particular philosophy in mind?
Kathy Vogelsang: When I started the investment office, it was just myself, so I didn't have a staff or a system. It was truly starting from scratch and I wanted to get the money invested quickly. The markets were going up and we didn't want to be sitting on a lot of cash. So we moved quickly, established an asset allocation and I spent a lot of time interviewing managers. Then, when I had a staff, we were able to take more time and tweak it more around the edges in putting it together. It’s evolved over time, as we've become more sophisticated with staff and systems in place.
Trusted Insight: What was the biggest hurdle that you had to overcome in achieving that?
Kathy Vogelsang: It was just trying to do many things quickly at one time. When there’s no staff, there’s a lot to do and a lot of traveling required to meet managers and do the due diligence.
Trusted Insight: Can you discuss about your portfolio as it stands? How are you looking to develop it in the future?
Kathy Vogelsang: We are pretty satisfied with where it is now. We've had it in place for 12 years now, so we’ve had enough time to get it to where it needs to be. It's a pretty standard endowment model, yet very well diversified. We have all the asset classes in there and we take a pretty hedged approach to our investing. We are trying to protect the downside as much as we can while still participating on the other side. It probably would be very similar to most endowment models as far as our asset allocation, with the exception that we hedge our equity probably more than most endowments do.
Trusted Insight: What’s your risk management approach? What factors do you consider when making investments?
Kathy Vogelsang: We’re very focused on risk management. We actually construct our asset allocation around our risk assessment. When we structure with our hedge funds, which we don't have a hedge fund bucket, we still look at correlation. Any equity hedge funds would be in a equity bucket. Any fixed income or credit opportunity type hedge funds would go into fixed income, so that the assets are correlated. When you're trying to put together your risk assessment, you have to look at how your assets are correlated. Having uncorrelated assets will give you the best diversification. For example, you've got hedge funds sitting over in a hedge fund bucket and not with your equity, so you've got two highly correlated assets, but you're not looking at them that way.
We make sure that we look at the correlation of the assets. When we look at new investments, we look at how a new investment will fit into the portfolio based on its correlation to the other assets that we have in the portfolio. We try to find assets that will provide a return stream that’s uncorrelated to what we already have in the portfolio.
Trusted Insight: Does that apply to geographical markets as well?
Kathy Vogelsang: It does. However, it's a little harder to do. It seems like the world has become more correlated making it more difficult to find geographic reasons that are not correlated. Some of the emerging markets might fit into that. We have a lot in emerging markets because we like some of the gross story in those markets. I would say that does fit in there.
Trusted Insight: You are investing geographically in Nigeria, Colombia, and Vietnam. How is the growth story in these emerging markets interesting?
Kathy Vogelsang: We found some emerging markets to be interesting such as Vietnam, Indonesia and India, which we will be looking into this year. The growth in those economies is above the average in most of the developed countries. Some of the areas we focus on include the growing consumer class, consumer products and, to smaller extent, health care. We are trying to move up health care in those countries to the standards of developed countries. We also see very young demographics and strong entrepreneurial spirits within those markets. All of those play into a theme that indicate growth opportunities.
Trusted Insight: As chief investment officer, what is the most enjoyable aspect of your job?
Kathy Vogelsang: I think just keeping up with what's going on in the world. I truly love information, news and what's going on in the world. I'm kind of news junkie. I love looking at it and trying to put it together all the global opportunities. I really enjoy that.
Trusted Insight: How do you think more women should be supported in reaching the top job positions such as chief investment officer?
Kathy Vogelsang: Yes, that's a big issue. That's something I've been working on. I'm part of the Michigan Women's Commission and one of the things that we’re looking at is seeing more women in higher positions, on boards, in STEM fields and in the financial fields. I think we have to work at getting women interested in the math and the sciences at a young age. One of the things I hear a lot is that there just aren't a lot of women pursuing those fields. I heard that they’re not promoted to higher levels because they are not visibly seen in those fields.
I'd like to see a real effort in promoting women, especially those in finance. I've talked to the local universities and they’re not seeing a lot of women going into the finance majors. I think we should encourage women to do that.
Trusted Insight: What are you looking forward to in the future of the investment office and your role at Van Andel Institute?
Kathy Vogelsang: I’m looking forward to finding new opportunities geographically and expanding through implementation of some strategies we’re working on now. I don't have anything to put my hand on now. However, our field is evolving quickly. It always is and that's one of the things I love about what I do. There's always something new out there and I hope to keep finding those new ideas that really get me excited.
Trusted Insight: What do you look for when hiring investment professionals?
Kathy Vogelsang: I require that they be CFAs and that they have a passion for investing. I look for people who either have a lot of experience or have given a lot of time and effort to their career. This shouldn’t be something that they're just looking to try and see if they like. It requires a passion, and I think my team does have a passion for it.
To learn more about women in institutional investing, click here to view the complete list of 2017 Top Women Chief Investment Officers. You can view our full catalogue of interviews with institutional investors here.