Endowment / Foundation Interviews
Hi All,
Does anyone have any examples of or is willing to speak to the structure of a case study that one might get in an interview for an investment role at an endowment or foundation?
- Are these usually take home or timed in the office?
- Tilted more toward manager selection, asset allocation, or some combination of the two?
- Hypothetical scenarios or real-life funds, where you're expected to go do some research?
Any responses on the above would be greatly appreciated, whether from analyst or mid-level interviewees!
Manager selection (most likely the focus): The case studies will typically be a description / few pages on a manager (or two). You could be asked to compare and contrast the managers, and discuss which would be a better fit given the endowment's structure and cost of capital. You may also be asked what questions you would ask them if you were to have an intro call with them. You should also have a few managers that you can speak to - why do you like manager A and not manager B.
I would focus on creating a framework for thinking about GPs and funds: 1) asset class, strategy, exposures, return profile, 2) what is their right to win, 3) fit within the endowment's exciting portfolio (with this manager bring diversifying alpha) 3) fees and alignment of incentives, 4) risks to the downside / likelihood of permanent impairment of capital.
Asset Class (less of a focus, but you will be asked a few questions about it): You should understand the high level asset class allocation and why they are what they are (why are we so overweight privates such as venture and how our long time horizon and lack of need of short term liquidity [outside of a very scheduled and predictable 4-5% spend rate] effect our allocation or sizing decision), but more importantly, how your frame of reference should change for the different asset classes. Example of this: 1) in venture, sourcing, picking (the right firms), and winning (competitive processes) are key, 2) private equity (control buyout) funds need to add value outside of financial engineering / multiple arb / multiple expansion, 3) long only managers need to know when to exit and generate alpha regardless of the beta (if they are facing a bullish or bearish market for what they play in) (and how to risk manage / portfolio construct so that if there is a large drawdown they implode), 4) Long / short, platforms / multi-managers are all about liquidity and alpha generation being consistent while limiting drawdowns.
Feel free to PM me to discuss further.
Thank you. The above makes sense. Would you say these case studies are typically take-home or you are completing it live in the interview (building slides/reports and presenting then and there)?
Bump. Anyone else has thoughts?
BBH?
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