Greenstream

What Can We Learn from Elite Endowments?

Are Elite Endowment portfolios and returns replicable for other investors? In this episode we unpack what we can learn from some of the most famous institutional investors: endowments. We discuss how their process is repeatable, but the evidence suggests their performance is not. We discuss the challenges of evaluating performance, the debate between whether they are taking more risk vs different risk to achieve higher absolute performance, how lessons from Moneyball can teach investors to play their own game, and more.
Meet with Greenspring: https://greenspringadvisors.com/contact/
Chapters
00:00 Intro - understanding endowments unique opportunities and constraints
08:04 Performance or Process¹ – process and governance offer more tangible lessons for investors
13:52 Spending Policies¹ – how separation of powers enables sustainable withdrawal rates throughout market cycles
19:53 Asset Allocation Insights², ³, ⁴, ⁵ – the research shows average endowment does not add alpha over simple indexes
27:39 Revisiting the Three Sources of Alpha³, ⁶, ⁷ – the evidence suggests any advantages from endowments do not come from informational alpha, it comes from asset allocation decisions
30:00 What do Elite Institutions Do Differently: Alternatives²,³,⁷ – the real debate is whether they are taking different risk or more risk
36:15 Democratization of Alternative Investments – questions to ask to determine if the alleged benefits of an investment transfer to you as the investor
44:06 Structural Advantages of Endowments – are you the NY Yankees or Oakland A’s? Play your game and you can still be successful
Sources
¹The Interaction of Spending Policies, Asset Allocation Strategies, and Investment Performance at University Endowment Funds (Brown, 2013)
² NACUBO Allocations and Performance (2024)
³ Do (Some) University Endowments Earn Alpha? (Barber, 2013)
⁴ What Does Nevada’s $35 Billion Fund Manager Do All Day? Nothing (WSJ)
⁵ Nevada 2024 Update
⁶ The Three Ways to Beat the Market (And Why Most Investors Don't) | GS #2
⁷ Endowments in the Casino: Even the Whales Lose at the Alts Table (Ennis, 2024)
 
Greenspring Advisors is a Registered Investment Advisor (RIA) and does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.

Patrick McQuown on Innovation and Exiting Your Business

Patrick McQuown joins to discuss exiting your business and innovation in Baltimore. Patrick is a 2x founder and the Executive Director of Entrepreneurship at Towson University, where he leads the StarTUp coworking space, accelerator, and incubator. Pat, Marcus, and Patrick discuss the importance of planning for a transaction in advance, how to execute that plan in a way that fits your goals, and most importantly, what to think about after the sale. They also discuss Patrick’s entrepreneurial journey of operating businesses, advising business owners, and mentoring entrepreneurial ventures. They highlight how the StarTUp is driving innovation in Maryland.
Meet with Greenspring: https://greenspringadvisors.com/contact/
00:00 Intro to Guest Patrick McQuown¹ – 2x founder and now running Towson U’s StarTUp Incubator and Accelerator
02:04 Unlike Any Building in the World² – how the StarTUp is breaking the mold to support innovation in the Maryland way
04:21 Get Your Finances Tight and Right – the importance of getting your house to make sure you don’t end up like FanDuel’s founders who got none of their $450M sale
07:00 Exiting to an Institutional Investor – every word of a 90-page sale document is a right you had and right you lost
08:48 Builder vs. Seller Mentality – don’t take it personally but can this thing print money Now, without You?
11:37 Different Types of Buyers – strategic, private, venture, time wasters, and internal: what do they want?
15:32 Get Your House in Order – look like a dream acquisition, not a fixer upper AND still prepare for buyer shenanigans
19:18 Building a Support Team for Exits – why one of Patrick’s best decisions was to bring an adult into the room who never counted his money, just what’s best for the business
22:24 Understanding Deal Structures – you tell me the price and I’ll tell you the terms
28:07 Telling Your Team – avoid the extremes: you aren’t the town crier, but this isn’t also witness protection
32:11 Managing the Wealth from Your Exit – prepare for the surprise tax bill and Patrick’s wish he 179’d his way to a private jet
36:27 Finding Purpose After an Exit – advice to find a way to stay in the game and Patrick’s evolution to academia to support entrepreneurs at Towson U
40:19 Joint Venture Venture Studio – Towson StarTUps partnership with MedStar to bring Medical Technology inventions to market
42:44 Innovative Ventures Done the Maryland Way – Jbrds children’s shows, Miva bottle + foam roller, Zenjoy relaxation drink, and sleep apnea
45:43 Money is a Bit Like Manure – When you pile it up, it smells, but when you spread it around, it tends to grow things
49:27 Learn more about StarTUp³ – sign up for the newsletter, join events, and use the free space.
 
Sources
¹ Patrick McQuown’s bio - https://www.towson.edu/campus/partnerships-research/patrick-mcquown.html
² Poets and Quants article on Towson StarTUp - https://poetsandquants.com/2024/10/11/unlike-anything-anywhere-in-the-world-inside-towsons-open-to-all-startup-accelerator/
³ Towson University The StarTUp - https://www.towson.edu/startup/
Greenspring Advisors is a Registered Investment Advisor (RIA) and does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

What is a Financial Plan?

Meet with Greenspring Advisors: https://greenspringadvisors.com/contact/
What is financial planning? Join us for a conversation on what financial planning done well looks like and how to tell when it’s done for the wrong reasons – typically if the conclusion is to buy a product a salesperson receives a commission on. We discuss the difference between static versus dynamic plans, how your families’ plan is similar and different to a company’s financial plan, and trade-offs in the accumulation and withdrawal phases of life. And more.
Sources
1 Riskiest Day of Your Life – a flashback to Pat’s 2015 article discussing the tradeoffs between short- and long-term risks at retirement. The Riskiest Day Of Your Life
2 Exploring the Retirement Consumption Puzzle – David Blanchett’s (Morningstar) research on declining spending in retirement, despite higher inflation for goods common in retirement https://www.financialplanningassociation.org/article/journal/MAY14-exploring-retirement-consumption-puzzle
Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.

The Three Ways to Beat the Market (And Why Most Investors Don't)

Pat Collins and Marcus Schafer discuss using evidence to inform your investment philosophy and why it’s important to have one. We dive into the three ways to beat the market, the evidence evaluating if those attempts are successful, and the three things investors can control to maximize their chances of success.
 
Chapters
00:00 Intro – The difference between the evidence of investing and the act of selling investments.
03:01 Why We Invest – Having your money work as hard as you do to live your ideal life.
05:50 Markets Work¹ – The evidence overwhelmingly suggests following an approach where the price is the best estimate of value.
10:15 The Three Sources of Alpha²– Nobel Laureate Robert Merton’s framework for the three ways to beat the market.
11:43 Skill vs. Luck in Investing³,⁴ – Skill is repeatable, luck is not.
15:11 Risk Factors – Not all investments have the same expected return.
20:18 The Three Reasons Why Active Managers Underperform – Costs, risks, and taxes.
21:29 Costs Matter – How explicit and implicit costs are connected to performance.
30:07 Risks Matter – Diversification is the only free lunch in investing.
36:29 Taxes Matter⁵ – One of Wall Street’s hidden secrets is reporting pre-tax performance when investors care about after-tax wealth.
41:27 Decisions and Outcomes – The importance of focusing on making good investment decisions based on the knowledge at the time, not the outcomes.
48:39 The Golden Age of Investing – The traits that make great investors might surprise you.
 
Sources
¹ SPIVA – an annual study of active managers that finds 90%+ of US funds underperform the benchmark over 20+ years.
² Robert Merton’s Three Sources of Alpha – traditional and information advantage, risk dimensions, and financial services alpha.
³ Morgan Housel’s Same as Ever – the power of being an average investor for an above average time.
⁴ Dimensional’s Fund Landscape Report – the challenge of persistence and other factors driving active management underperformance. ⁵ SPIVA After-Tax Scorecard – tax inefficient investments are estimated to cost investors 1-2% per year, but the industry often reports pre-tax performance that doesn’t show this.
 
Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.

Why Greenspring?

Pat Collins, CFP®, EA, and Marcus Schafer, CFP®, MBA, explore what sets Greenspring Advisors apart in the world of wealth management. In this episode, we’ll dive into our firm’s mission and vision, exploring how this guides our client-first approach and shapes our core values. We'll also discuss the importance of being an independent financial advisory firm, fostering an ownership mentality among employees, and how this combination leads to a unique and personalized client experience. Stay tuned as we unpack how these values drive long-term success and financial security for their clients, community, and team members.
 
Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.