Carlos Rangel is the vice president and chief investment officer of the W.K. Kellogg Foundation (WKKF). Previously, he served as director of investments and led the foundation’s Expanding Equity program, after joining the foundation in 2010 as a portfolio manager. Rangel holds a bachelor’s and a master’s degree in finance from the University of Michigan-Dearborn. He is certified as a CFA (Chartered Financial Analyst), FRM (Financial Risk Manager), CAIA (Chartered Analyst of Alternative Investments), and has certificates in performance measurement (CIPM) and Sustainability and Climate Risk (SCR).
In this interview, he discussed the importance of laying the groundwork to be a data-driven team, how the WKKF focuses on leadership development, and the Foundation’s 90-year experience and capacity-building in diversity, equity, and inclusion.
Carlos Rangel was named to Trusted Insight's Top Transformational Leaders Of Last Five Years: 2022.
Trusted Insight: For the new readers of our investment community, tell us about the W.K. Kellogg Foundation’s investment office? What are the current assets under management, team size/structure, and your role there as CIO?
Carlos Rangel: The goal of the foundation is to change outcomes for children when it comes to health, education, and economic opportunities for their families and communities. The mission motivates the team to show up every day.
The W.K. Kellogg Foundation investment office manages about $8.5 billion in assets with a thirteen-person team. During 2021, we shifted to a specialist model aligned around functional asset classes: private investments, hedge funds and fixed income, and public equities. As part of the realignment, we also added a risk management and tactical asset allocation function.
Trusted Insight: How has the asset allocation strategy changed in the last decade and how will it evolve moving forward under your leadership?
Carlos Rangel: The Foundation is such a great place to work that the team has been together for a long time; limiting the investment impact from the leadership transition. The asset allocation strategy has evolved into being a traditional endowment model style of allocation. In the last two years, we added to private investments, particularly venture and international markets. We've been very active in the co-investment space and with our private managers. We've also added overlays to our public equity portfolio. We think that's been a great tool that we've been able to add as a team. Many of us on the team were directly asset in the asset management space before becoming allocators. We do some direct investments via ETFs or trading directly into securities.
Over the last decade, the allocation has followed the path of most foundations, delving deeper into alternative investments. Differentiators would be a focus on finding promising emerging managers, the diversity of our U.S. investment managers, and an active co-investment program. In the last year, we’ve emphasized team-driven ETF and overlays, building on a successful track record.
Operationally, we are laying the groundwork to be a data-driven team. I believe technology paired with a high-performing team culture will be the key to adding value over the next ten years.
Trusted Insight: There were headlines of endowments and foundations making historical returns in 2021. What opportunities presented themselves to the W.K. Kellogg Foundation last year?
Carlos Rangel: We had one of our best absolute and relative performance years. The bumper crop is particularly meaningful because the foundation issued a bond during the summer of 2020 to increase its grantmaking by 50% per year for two years, in support of communities, families, and children at a time of health and economic crisis. We were able to increase grantmaking at a time of dire need (2020 – 2022), issue a bond at historically low rates, and stay invested over two strong years to support increasing programmatic funding.
Trusted Insight: Does the team currently work from home and from the office (hybrid model)? How has working remotely affected the team dynamic and the role of an asset allocator?
Carlos Rangel: We installed Zoom and Slack during 2019. The team embraced our new digital tools as we started working from home and has been more productive than we could’ve imagined. We didn’t miss a beat with our investment program and even found ways to diligence international managers soon after we transitioned to working from home.
One of the benefits of working at the foundation is the focus the organization has on leadership development and team development. As you go into a Zoom and a virtual environment, there's been real intentionality about how do we foster teamwork and integration? How do we create dynamics so that everybody within the team has an opportunity to be heard?
We are now in a hybrid model, with the office available as one more work tool and back to traveling. I am eager to see the team, managers, and our peers in person.
Trusted Insight: What unique investment programs or initiatives is WKKF involved in? Institutional investors are spending more time focusing on Diversity, Equity, and Inclusion (DEI) programs or climate change initiatives.
Carlos Rangel: The Foundation's DNA has three strands. The first one is racial equity. We use a racial equity lens on every grant that we make. The second one is around community engagement. The third one is a focus on leadership development. We believe that every community has leaders that can be catalysts for positive change. The foundation has ninety years of experience and capacity-building on what we call DEI today.
We connected our investment managers with the foundation’s focus on racial equity through a program called “Expanding Equity.” We started with five investment managers within our portfolio that were willing to go through different workshops to create a DEI plan and then change management strategy to execute that plan. Expanding Equity blossomed into a DEI community covering over 80 organizations with 3.5 million employees globally. We're very excited about how that grew and how companies chose to engage with the foundation.
Additionally, we continue our efforts to advance racial equity through our Diverse Managers Program. If there are any diverse managers interested in learning more, please reach out to us.
Trusted Insight: Does the digital assets space interest you and your team? It's a relatively new idea that LPs have started keeping a closer eye on.
Carlos Rangel: It’s interesting, one of the members of the IT team told us about Bitcoin at $400. Next time we'll listen sooner because we think it's a fascinating space that we're bullish on the applications for blockchain. We have a modest exposure through our alternatives managers. We're at the studying phase from an exposure perspective, we now have laid up the framework and the mapping needed to custody those assets if we were to buy into them.
At the moment, we are more likely to pursue these ideas through a fund format particularly on the venture side or through hedge fund that could go long and short and apply the behavioral lessons from the equity markets.
View our full catalog of interviews here.
The full list of Top Transformational Leaders Of Last Five Years: 2022 can be found here.
In this interview, he discussed the importance of laying the groundwork to be a data-driven team, how the WKKF focuses on leadership development, and the Foundation’s 90-year experience and capacity-building in diversity, equity, and inclusion.
Carlos Rangel was named to Trusted Insight's Top Transformational Leaders Of Last Five Years: 2022.
Trusted Insight: For the new readers of our investment community, tell us about the W.K. Kellogg Foundation’s investment office? What are the current assets under management, team size/structure, and your role there as CIO?
Carlos Rangel: The goal of the foundation is to change outcomes for children when it comes to health, education, and economic opportunities for their families and communities. The mission motivates the team to show up every day.
The W.K. Kellogg Foundation investment office manages about $8.5 billion in assets with a thirteen-person team. During 2021, we shifted to a specialist model aligned around functional asset classes: private investments, hedge funds and fixed income, and public equities. As part of the realignment, we also added a risk management and tactical asset allocation function.
"Operationally, we are laying the groundwork to be a data-driven team. I believe technology paired with a high-performing team culture will be the key to adding value over the next ten years."
Trusted Insight: How has the asset allocation strategy changed in the last decade and how will it evolve moving forward under your leadership?
Carlos Rangel: The Foundation is such a great place to work that the team has been together for a long time; limiting the investment impact from the leadership transition. The asset allocation strategy has evolved into being a traditional endowment model style of allocation. In the last two years, we added to private investments, particularly venture and international markets. We've been very active in the co-investment space and with our private managers. We've also added overlays to our public equity portfolio. We think that's been a great tool that we've been able to add as a team. Many of us on the team were directly asset in the asset management space before becoming allocators. We do some direct investments via ETFs or trading directly into securities.
Over the last decade, the allocation has followed the path of most foundations, delving deeper into alternative investments. Differentiators would be a focus on finding promising emerging managers, the diversity of our U.S. investment managers, and an active co-investment program. In the last year, we’ve emphasized team-driven ETF and overlays, building on a successful track record.
Operationally, we are laying the groundwork to be a data-driven team. I believe technology paired with a high-performing team culture will be the key to adding value over the next ten years.
Trusted Insight: There were headlines of endowments and foundations making historical returns in 2021. What opportunities presented themselves to the W.K. Kellogg Foundation last year?
Carlos Rangel: We had one of our best absolute and relative performance years. The bumper crop is particularly meaningful because the foundation issued a bond during the summer of 2020 to increase its grantmaking by 50% per year for two years, in support of communities, families, and children at a time of health and economic crisis. We were able to increase grantmaking at a time of dire need (2020 – 2022), issue a bond at historically low rates, and stay invested over two strong years to support increasing programmatic funding.
"One of the benefits of working at the foundation is the focus the organization has on leadership development and team development."
Trusted Insight: Does the team currently work from home and from the office (hybrid model)? How has working remotely affected the team dynamic and the role of an asset allocator?
Carlos Rangel: We installed Zoom and Slack during 2019. The team embraced our new digital tools as we started working from home and has been more productive than we could’ve imagined. We didn’t miss a beat with our investment program and even found ways to diligence international managers soon after we transitioned to working from home.
One of the benefits of working at the foundation is the focus the organization has on leadership development and team development. As you go into a Zoom and a virtual environment, there's been real intentionality about how do we foster teamwork and integration? How do we create dynamics so that everybody within the team has an opportunity to be heard?
We are now in a hybrid model, with the office available as one more work tool and back to traveling. I am eager to see the team, managers, and our peers in person.
"The Foundation's DNA has three strands... We believe that every community has leaders that can be catalysts for positive change. The foundation has ninety years of experience and capacity-building on what we call DEI today."
Trusted Insight: What unique investment programs or initiatives is WKKF involved in? Institutional investors are spending more time focusing on Diversity, Equity, and Inclusion (DEI) programs or climate change initiatives.
Carlos Rangel: The Foundation's DNA has three strands. The first one is racial equity. We use a racial equity lens on every grant that we make. The second one is around community engagement. The third one is a focus on leadership development. We believe that every community has leaders that can be catalysts for positive change. The foundation has ninety years of experience and capacity-building on what we call DEI today.
We connected our investment managers with the foundation’s focus on racial equity through a program called “Expanding Equity.” We started with five investment managers within our portfolio that were willing to go through different workshops to create a DEI plan and then change management strategy to execute that plan. Expanding Equity blossomed into a DEI community covering over 80 organizations with 3.5 million employees globally. We're very excited about how that grew and how companies chose to engage with the foundation.
Additionally, we continue our efforts to advance racial equity through our Diverse Managers Program. If there are any diverse managers interested in learning more, please reach out to us.
Trusted Insight: Does the digital assets space interest you and your team? It's a relatively new idea that LPs have started keeping a closer eye on.
Carlos Rangel: It’s interesting, one of the members of the IT team told us about Bitcoin at $400. Next time we'll listen sooner because we think it's a fascinating space that we're bullish on the applications for blockchain. We have a modest exposure through our alternatives managers. We're at the studying phase from an exposure perspective, we now have laid up the framework and the mapping needed to custody those assets if we were to buy into them.
At the moment, we are more likely to pursue these ideas through a fund format particularly on the venture side or through hedge fund that could go long and short and apply the behavioral lessons from the equity markets.
View our full catalog of interviews here.
The full list of Top Transformational Leaders Of Last Five Years: 2022 can be found here.