“Many black and brown asset managers, even women, have not been hiding…. you simply need to fish in a different pond.”
Angela Matheny joined Crewcial Partners in July 2016. She is the firm’s CIO and co-manages the investment. Angela also continues to drive the firm’s manager diversity initiative to attract and source diverse asset managers while monitoring protocol and the internal vetting process of women and diverse asset managers.
The private equity and venture capital space continues to see a dearth of black and brown asset managers. For too long, companies and its leaders operate within their existing networks, leading to less exposure of diverse candidates. Beyond the social good, diverse teams offer real financial benefits by bringing in different perspectives that ultimately lead to stronger investment portfolios. “One of the ways that we like to think that you can incorporate that downside protection is actually implementing diversity, which leads to diversity of thought, which then leads to diverse outcomes.”
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SPEAKER
Angela Matheny
Director, Investment Staff & Head, Diverse Manager Equity
Crewcial Partners
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
John Darsie: (00:08)
Hello everyone and welcome back to SALT Talks. This is John Darsie here, the managing director of SALT, which is a global thought leadership forum at the intersection of finance, technology, and public policy. And it's great today to be back in SALT HQ. Got the great branding over my shoulder. It's my Wednesday pilgrimage into Manhattan. And it's good to at least start to get back to a little bit of normal. But we're excited to continue our SALT Talk series. What SALT Talks is, is a digital interview series that we launched during this work from home period with leading investors, creators and thinkers. And what we're trying to do during SALT Talks is replicate the experience that we provide at our global conferences, the SALT Conference. And that's really to provide a window into the mind of subject matter experts, as well as to provide a platform for what we think are big ideas that are shaping the future.
John Darsie: (00:58)
And we're very excited today to welcome Angela Matheny to SALT Talks. Angela joined Crewcial partners in July 2016. She and the firm CIO co-manage the investment team, to ensure internal processes are efficient, while managing the firm's manager selection process and the systematic process that helps best ideas that are constructed into portfolios. Angela also continues to drive the firm's manager diversity initiative, to attract and source diverse asset managers, while monitoring protocol and internal vetting processes of women and diverse asset managers. Angela facilitates the constant communication between crucial partners and fund managers, as the firm continues to build a robust pipeline of what it believes are truly the most largely under followed segments of the asset manager community marketplace.
John Darsie: (01:50)
Angela also acts as a conduit in sourcing diverse managers, when recommendations and introductions are made by clients and/board members. She frequently attends emerging manager and diverse manager conferences, returning with best practices while networking and learning about industry wide issues and the inclusive approach many institutions may take to include more diverse managers in their search processes. Angela received a master's in Public Administration at the Metropolitan College of New York. She also earned a certificate in Human Resources Management from Villanova University, which included studies in diversity and inclusion. She received her Bachelor's Degree in Psychology from Bernard Baruch College in New York, and she also serves on York College's Foundation Board. A reminder if you have any questions for Angela during today's SALT Talk, you can enter them in the Q&A box at the bottom of your video screen on Zoom.
John Darsie: (02:44)
And we're very excited to welcome back Sarah Kunst as the moderator on today's SALT Talk. Sarah is a managing director of Cleo Capital, which is a venture capital firm that she founded. And with that, I'll turn it over to-
Sarah Kunst: (02:55)
No, no. Don't you think you should be wearing... I mean, look at you guys. Don't you think you should be wearing a suit and tie? What's wrong with you [inaudible 00:03:01]?
Anthony Scaramucci: (03:01)
[crosstalk 00:03:01].
John Darsie: (03:01)
Come on, it's millennial.
Anthony Scaramucci: (03:02)
Jesus Christ I mean-
John Darsie: (03:02)
We like to be a little more comfortable.
Anthony Scaramucci: (03:02)
Enough with the millennial fashion. Enough with the millennial fashion.
Sarah Kunst: (03:09)
Anthony you look great.
John Darsie: (03:11)
Anthony got cargo shorts on underneath that suit. So let him not fool anybody.
Anthony Scaramucci: (03:13)
That's not true, Sarah. Okay. This is 100% Briony. Don't be listening to that.
Sarah Kunst: (03:18)
I believe you.
Anthony Scaramucci: (03:20)
And with that... Sorry Sarah, for that rude interruption from our typical host, Anthony. But we'll turn it over you for the interview, and we're looking forward to hearing more from Angela.
Sarah Kunst: (03:30)
Awesome. Thank you. And thank you guys for joining us, and especially Angela. I am thrilled and excited to have you here today. So we can talk about all the things we always talk about around diversity and investing. And what in the world is going on in the world of those things right now. But before we do that, give us sort of what you do and how you got here. Because I have talked to a lot of funds and allocators in my time, and you have one of the most, I think unique roles in the industry.
Angela Matheny: (04:02)
Thank you, Sara. So good to finally be at the SALT conference. And I'm actually very excited that you guys have a focus on diversity and inclusion as it relates to a lot of emerging managers that I see. And so I've been wanting to attend SALT for many years. And I just told one of the representatives at SALT, John, that I just need a reason to come to Las Vegas and many of the other places that you guys hold conferences, at internationally or nationally. And this is a really, really good reason. I'm always excited to talk about diversity and our focus at Crewcial Partners. So first and foremost, the big elephant in the room is that we have rebranded. We are formerly known as the firm called Colonial Consulting. Colonial Consulting was a name that we inherited from the owner, the first owner of the firm. He retired. Four owners currently bought him out. And we probably should have changed our name then but really what the name meant was that the owner had a love for sailing and boats.
Angela Matheny: (05:13)
But Crewcial Partners really reflects who we are today as a crew, as everything we do is a team effort. All of our colleagues in different departments are deeply embedded in the success of the firm. And so we've gone from maybe this concept of a sailing boat to a rowboat where we are all rowing together. And you can see the diversity reflected across the firm. And many people didn't know that we were so diverse internally. But I'm excited to direct people to our new website so you can see exactly what our focus is and how many of our colleagues are engaging. And really, you can see the reflection of diversity across our firm, as it relates to what we want to see more in America. So I was brought on board about four years ago to source diverse asset managers across five asset classes. We are a traditional investment advisory firm. And we work primarily with endowments and foundations.
Angela Matheny: (06:17)
And it looks a bunch of community foundation's that engage in grant making. And what's nice about our capital is that we are focused, and that we tend to have a very, very focused group in the sense that we work with clients who have a long term focus, long term goals in terms of growing their portfolios. And we're all trying to really earn seven plus inflation for our clients. And it's nice to have a well oriented goal to weather crisis such as the one that we're currently in. But our primary goal entails preserving our clients purchasing power, is what our CIO was always trying to do and most of the team each day. So after grants and spending and inflation, the question is, can you really earn a return that exceeds that? Now, as it relates to our focus on diverse managers, it's deeply embedded in our investment philosophy.
Angela Matheny: (07:13)
And so again, four years ago, I hit the pavement nationally. Going to many, many cities, looking for diverse asset managers, partnering with trade organizations, exercising the many resources that they have. The educational component of many of these conferences such as NAIC, NASP, TOWEGO, SEO. There's so many of them now and so many new ones focusing on venture capital. I found that there is a talented group of individuals that include women and people of color across asset classes. I'm happy to engage with them, happy to bring back so many inquiries. And then we just drill down, take meetings, conduct overviews. I do what I call triage, to see what exactly a manager is building and to see basically if they're ready for a client's capital. Now, I don't make that decision alone. So I often bring many of my colleagues into meetings. I seem to have a lot of first time meetings myself, and then just running up the flagpole see if there's any particular interest, particularly when a strategy comes across as something maybe convoluted, structured products and hedge funds.
Angela Matheny: (08:31)
A lot of things that are complex that I haven't seen, we tend to not overall invest in... We don't invest in things that we don't understand. And so the team is very engaged, they're now sourcing their own diverse managers, although I was initially focused on this effort 100% of the time. I'm glad to see that everybody is building this pipeline of robust managers that are underserved and under source.
Sarah Kunst: (08:59)
I love it. I wish that every big allocator took a page from your book, because I think that it's obvious that they brought you on, and it was super helpful to help kind of grow what they want to do. And so that's great. So tell me-
John Darsie: (09:14)
And we look forward to collaborating on the SkyBridge side, with your pipeline of diverse managers, It's something that we've started to focus on in recent years. After this talk, we're looking forward to putting our heads together on that as well, Angela.
Angela Matheny: (09:27)
Perfect. That would be great. It's an ecosystem. So I love that you said that.
Sarah Kunst: (09:31)
Yes, yes. It takes all kinds and we are very excited to see people like SALT and SkyBridge lean in on that. That's literally how I met SALT. I cold emailed them and said, "Hey, can I come to your conference in Abu Dhabi? I want to speak. And they're like, "Okay." And then now we're here. So I love that spirit of collaboration. So tell us a little bit about, we know it's bad but it never hurts to hear specifically how bad it is. What is the landscape look for Black and Hispanic fund managers across kind of all the asset classes that you cover?
Angela Matheny: (10:04)
Well, I'm still having a challenge finding Black and Hispanic hedge fund managers. I can count on one hand how many there are in the US. There's a bit more in the UK. But it points to opportunity or lack of opportunity, on a corporate level to even have the opportunity to get hired by top tier firm or any firm. It doesn't even have to be top tier, but really, really good investors, where black and brown managers across various asset classes can cut their teeth and sort of learn the blueprint of the firm is what I always like to say. But that training and mentorship is huge. And if HR doesn't have the backbone to create a strategy to allow leadership to lean in, and listen to what they have to say, in terms of building a diverse workforce, that's where we see the dearth of talent across asset classes. So a challenge in the hedge fund area, a challenge maybe even in US equities, we are seeing a handful of white women and Asian asset managers.
Angela Matheny: (11:06)
And so turning to the black and brown community, there are huge opportunities currently, particularly in private equity and venture capital. Because everybody's paying attention to what I call the ratio pandemic. And particularly what our clients being nonprofit organization, you would think that they're well aligned in terms of their missions, their values, and who they serve in their community, but they have woefully and inadequately allocated to diverse managers traditionally, and to me that may point to the fact that maybe boards or committees are homogenous groups, and so they're just doing more of the same, trucking in the same network. It also points to what I hear a lot that consultants are the gatekeepers. So are they making the recommendations? But even going a step back, are they even building a pipeline of managers that look different from the managers that are typically on the roster?
Angela Matheny: (12:07)
And so the importance of me being appendage, initially an appendage to the team, and sourcing women and diverse asset managers has been a huge focus as you know Sarah, but it's really important in terms of portfolio diversification, because for us we feel it's sort of a downside protection kind of thing in order to build a diversified portfolio across age, gender, ethnicity, even geography. So there's many ways you can do portfolio construction. And one of the ways that we like to think that you can incorporate that downside protection is actually implementing diversity, which leads to diversity of thought, which then leads to diverse outcomes.
Sarah Kunst: (12:48)
And as we know, diverse teams tend to drive better results. Yes, I love that. So to what can allocators and investors do? You mentioned this, if it's a consultant or wherever these roadblocks are. What can allocators and investors do to be better at sort of attracting and funding diverse talent? Because we're out here I exist, but how do more people I guess, on that side get in front of me, just as I'm trying to get in front of more people?
Angela Matheny: (13:13)
I love how you said you're out there and you exist. And that's the thing, you haven't been hiding. Many black and brown asset managers, even women have not been hiding. And so you simply need to fish in a different pond, whether you want to initially hire someone to tap into those networks. I think that initially, maybe some people don't feel comfortable answering certain rooms. I remember a CIO told me years ago of a story of him actually being the minority in a room, when he attended consortium's conference led by the great Renae Griffin, who's now at Grosvenor. And he talked about that experience, and he didn't say that he was uncomfortable in any way. What he said was that it was different but he saw for himself firsthand, this diverse room, this great... he had a sense that they were a talented investors. Were they the right type of investors for us in terms of aligning with our investment philosophy, and a lot of the other things that we look for in our diligence process? Well, that remains to be seen.
Angela Matheny: (14:16)
But one of the jobs that he charged me with was just go out. And he didn't tell me how to do anything that was so fascinating about my role. The huge sense of autonomy, how I just went out and I checked in different places across the nation and I brought back all these inquiries. And we found that the talent was out there, I had no problem engaging with any group. And so now we're about four billion, north of four billion allocated to diverse asset managers of the... I want to say 35 billion plus assets that we manage for our community foundation, that number probably went up because we just got a couple of new clients on board. But it's approximately 35 billion. And there's no finish line to this effort, we're going to keep going until all of our clients portfolios reflect the diversity that we need to see. Again, not having to do anything with really ethnicity, race, or whatever you want to call it. But diversity of thought.
Sarah Kunst: (15:18)
Yeah, yeah. So for every allocator who's like, "We just can't find them. You have some four billion worth add." There you go. There's the proof. Anybody who can't find them needs to come talk to Angela. That's awesome. And then also everybody, feel free to drop questions in the Q&A. Angela is a wealth of knowledge, and one of my absolute favorite people to talk to about these topics. I'm a VC, so I to talk to her about venture capital, but she spends a lot of time looking at other strategies, including hedge funds which I know a lot of you are big fans of. So definitely drop questions, and we will go through them as they come in. So, Angela tell me, what does it look like? And you and I talked about this a lot. Because I have my first fund and getting started on my second. What does it look to be fundable by a large allocator? Right?
Sarah Kunst: (16:10)
It's not just going to your buddies and saying, "Hey, I'm smart. Give me some money." What does it look like? What are the things where you see people and you're just like, "No, you're messing it up. This is what you're supposed to do." What are the common mistakes? And what are the things where you're like, "Yes, this is what you need to do. Go do more of it."
Angela Matheny: (16:27)
Well, first of all, I don't want to take total credit for the four billion that we have allocated across all those asset classes, because I have a really, really great group of colleagues behind me, although we did focus on me doing 100% of the sourcing initially. But to answer your question. Oh, my God, I just drew a blank about your question.
Sarah Kunst: (16:50)
So my question was-
Angela Matheny: (16:52)
[crosstalk 00:16:52] about my team.
Sarah Kunst: (16:54)
... How do you be investible right by large allocators?
Angela Matheny: (16:57)
Oh yeah.
Sarah Kunst: (16:57)
Because a lot of people get started, you're raising money from friends or angels. And then leveling up and you and I have had this conversation, to get the money from the large allocators is a whole different ballgame. What should they do? What should people not do? What are common mistakes you see? Give us a playbook.
Angela Matheny: (17:13)
Okay. So I have some pet peeves, I'll get to that in a second. But the answer is kind of fluid because it depends on what allocator you're approaching. You really have to do your homework. So I've attended all sorts of conferences. I've attended emerging manager conferences, which is largely hosted by a lot of pension plans, defined pension plans. They usually have a lot of large mandates. And so they want you to manage large amounts of capital, and your strategy may not lean to that. I just started seeing before we all started working from home, more venture capitalist at the conferences that I attend. The really large ones with, again, a lot of mandates. So I thought, "Wow, I'm seeing some venture capitalists at these conferences. So that means that maybe Community Foundation clients are there or smaller LPs like us who appreciate smaller funds are there, and we can eat up a $20 million fund, right?" We like $100 million fund.
Angela Matheny: (18:15)
So, we tend to say that the small funds that we see that would traditionally be too small for a lot of large allocators, they actually perfect for us because we want to grow with them. And so some of my pet peeves is with the small funds, because they're just starting out. There are some rookie mistakes. There's like, no website, no contact on the website. I can't tell you how many times I've been up two in the morning on a Friday, or maybe on a Saturday, just bored not doing anything, or believing that this is a mission and it's something that keeps me awake at night. I comb website. And sometimes I'll look at someone's strategy and I'll think, "Wow, that looks kind of perfect for us. It was really interesting. I would like to reach out to this individual," and there's no contact information. Somebody will probably email me from their Gmail account and say that they're fundraising. "Well, why don't you have a website and a real email address that connects with your funding."
Angela Matheny: (19:11)
And then people are fundraising and they don't have all of their fund documents. So that means that on many levels, maybe you're not ready to go to market, you don't have a data room. You don't have something as simple as a DDQ, which you can download if you just Google it. There's so many rookie mistakes. But one of the largest things I want to say for this audience is just try not to be all things to all people. Really tell us what's your unique edge. What's the differentiator in your strategy? What inefficiencies are you finding in the market that you're capitalizing on? And why this fund now? And why this fund size? And if you come back to market and let's say your fund size is double, we want you to walk us through what opportunities are you seeing that warrants that larger fund size? Large funds, maybe I think of it as maybe if we wanted to invest in a BlackRock, or one of the larger asset managers, we would do that if a fund is too big you sort of become the market. And we saw how that looked back in 2008.
Angela Matheny: (20:20)
And so we sort of have a niche for small managers. But I'm always open to discussion, early building of relationships, to walk people through the do's and the don'ts. I even get them ready. Meeting ready for our team. And you know you and I have done that a lot. Don't present yourself as a networker. I think we have enough networking professionals in this industry. And so what we want to see is what your value proposition if we're talking about private equity or venture capital? What level of expertise do you bring to the fund, where your founders can really leverage that expertise? It has to be something beyond you writing a check, and just walking away. Can they call you? Can you take them through the different iterations of, how they're going to scale and grow their business and then survive? And are they right for venture capital? And so we want to hear about your sourcing, what questions do you ask? What's a non starter when you find a founder? Do they have to be a revenue generator? What's precede? Define that for us because we all know that the goalpost keeps moving.
Angela Matheny: (21:30)
And so yeah, there's just so many questions. But we really, largely just want you to be you, bring your authentic self to the meeting, pitch authentically, don't worry about what we're looking for, what we're going to say. I think that even if we don't end up writing a check, you'll get a wealth of feedback. And it's probably maybe a not right now instead of a no. And we see that over and over again.
Sarah Kunst: (21:55)
Yeah, yeah. That's also helpful. We have a couple questions. So we're going to start with Lisa Hinze, who asked, "Can you speak to the demand side? What are endowments and foundations asking for with respect to diversity? What's driving them?" Are you getting calls saying, "Hey, we need to allocate to diverse managers." Or are you more having to push that?
Angela Matheny: (22:18)
So, pre pandemic, it was slow moving. We have a handful of clients that actually love to look at diverse managers, and they're trying to solve either housing crisis, they're focused on impact. And we allow them to define what is impact for them. Some clients may want to put all diverse managers women into an impact pool or bucket. So again, we don't define it for them. But when we source a manager and we diligence them, put them through our process. And finally, we're at approval, and then we're pitching to our client base, we are thinking that this is a high conviction manager, we don't want to put them in a sleeve or carve out a section for them, they should be part of the general portfolio. So having said that, a lot of our clients don't have a mandate for diversity. But if you comb a lot of these websites, particularly for nonprofits or community foundations, you will see that their mission and value is geared towards that.
Angela Matheny: (23:14)
And a lot of them probably want to invest maybe in a local manager, or they want to invest in a black or brown manager, because they want to solve this racial equity problem. But we haven't seen any hard mandates, what we have seen and helped with was getting manager diversity language into their investment policy statement. I like that idea. And we've helped with that numerous times. Because I think that that has to be sustainable as boards turnover. I can't imagine a new board member coming on the scene and saying, "Why is this language here, we should take it out." And so it held it helps to hold the committee accountable for what they should be focused on, and so that's why it's important to have it there. And so now in the current environment, yes, we're seeing so much interest in black and brown managers and women. They want to see what they're building. I get inbounds all the time about diverse managers in the venture space, because many managers are picked up by the media in various ways, and everything looks good. And everybody's excited about what someone is building.
Angela Matheny: (24:23)
Some of it is promotional. When we look under the hood, we can tell how ready they are for our clients capital. And so that's where I come, trying to really have real down to earth conversations to walk them through our process and to see whether they're ready or not, again for our clients capital.
Sarah Kunst: (24:40)
Yeah, yeah. That's super helpful. And then Mark asked, "Are the comments you made about the VCPE industry germane for minority, private equity, real estate manager too?" And then he says, "Keep up the good work." Which I agree you're doing amazing work. But yeah, I mean, does this apply to all strategies? Do you see massive differences in writ versus hedge funds versus VCPE? Or what do you think about that?
Angela Matheny: (25:07)
I'm seeing if the question relates to, where am I seeing the most diverse managers? I'm seeing the most in the private equity space, particularly venture. Again, there's still a dearth of the managers that we haven't seen traditionally. Many investors and hedge funds, global equities, even US equities. I would love to see some Hispanics that I could vet in that space. But I think that private equity and venture is probably a more, what we call I hear this word a lot, sexy asset class. And what I'm also seeing is people with very nontraditional backgrounds enter the space in many ways. So that's interesting.
Sarah Kunst: (25:53)
Yeah, that's amazing. That's awesome. And then [Kai 00:25:57] ask, he says, "GMO that the large money manager has very low equity return expectations for the next seven years." Aka the recession might finally hit that feels we've been waiting for since mid March. "Do you have return expectations for hedge fund, venture funds and private equity for the same period?" So how are you guys thinking about, if the bottom finally comes for us. If the stock market here is about what's the pandemic. Well, what does that mean?
Angela Matheny: (26:29)
We've been having a lot of conversations around this. And I think people are basically, as you alluded to, we're waiting to see if the bottom is going to fall out. We see decreased valuations, if you look at private equity, particularly venture. And we're waiting for things to shake out. But we always have high expectations about many things, but everyone's listening to what's going to happen with the election. For instance, what return expectations are we expecting? Who knows? People have this maybe macro focus. They want to time the market, I don't know. It's going to be what is going to be, and then we'll try to see what are we going to do with the cards that we've been dealt. But we always, we're not going to change our sourcing metrics. We're not going to lower the bar in any way, in terms of what we would traditionally expect. But we'll see. I think that we're all looking from a high level, don't want to lower our expectations.
Angela Matheny: (27:36)
But we'll be where we're going to be, and we'll do the best of what we can and we'll continue to source all types of managers and look to see what's out there that we can capitalize upon. We just did a revisit of our asset allocations, as it relates to how much heavily weighted are we in global equities versus US equities. And so it's just a model, whether or not we follow the new model, or we go with the model that we created in January, I think we'll see. But a lot of our clients because they're nonprofits, they're looking for liquidity for a number of reasons. We have university clients and students are not in class, and they've lost their revenue generating engines. And so, when we look at global equities or any type of equity, sometimes we try to... The consultants, I hear them say a lot, they tried to talk them down in terms of selling. But the real truth is, is that, if something has done well in equities you want to sell so you can buy something else. You want to have that purchasing power for your client.
Angela Matheny: (28:51)
And so a lot of times it makes sense. But we're trying to see what we can do. And sometimes I kind of feel as an advisor, and I don't want to speak for my firm but this is how I see things. Are we in this sort of lame duck session where we're just sitting back and seeing what's going to shake out to see how we can really best advise our clients? And how can we continue to grow their capital on a long term basis? I don't know. We'll see what happens. But we're not veering away from our investment philosophy.
Sarah Kunst: (29:22)
Yeah, yeah. I love that. And then Wang asked, "Do you work with private debt managers?" He said, he doesn't see much diversity in that space.
Angela Matheny: (29:31)
Yeah, I don't see much diversity in that space either. Actually, we just talked this week with our investment team about two private debt managers. One was, we were looking at distress, we were looking at a lot of credit. And so one of our investment directors, actually yesterday two of them talked about a housing strategy. And we want to be really, really careful. And so looking at the hood and really, really, what is that strategy mean? We looked at non performing loans, we think about what are people actually doing out there? Again, our client base is not going to agree with a lot of things that are happening. But there are opportunities that we should capitalize on. But we want to be really, really careful to make sure that we're not doing more damage than good.
Sarah Kunst: (30:20)
Yeah, yeah. And so Kai asked again, "What are your approaches to evaluating emerging and new hedge fund managers and strategies?"
Angela Matheny: (30:30)
It's the same across all five asset classes. I mean, we ask different questions, obviously of different managers. But I'll tell you one thing, low AUM is not a deal breaker for us because as I said earlier, we want to be able to grow with that manager. So we are paying attention to AUM because we want the business to be strong and viable. We've been known to be anchors as well. And while we rather not be such a large portion of your business, we will be that first check to come in, to allocate to you if we have high conviction in you, the strategy, your investment acumen, your passion for investing. There's just so many boxes to check. But really, we need to see what sort of firm do you want to build? What sort of team are you bringing in? What sort of team do you want to build? And have you all invested together before? All of these things matter. We want relationships to be tested. We don't like risk adverse investors.
Angela Matheny: (31:30)
And so if there's a lot of volatility in the strategy, we tend to get our clients comfortable with volatility, if that's something that they want to see. But it doesn't scare us. So our CIO in particular, he's a real contrarian investor. So as long as we can understand what you're doing from an underwriting standpoint, and you're very transparent with us. Everyone is trying to get comfortable. But again, just be yourself, be unique. And I think that you'll have a successful meeting.
Sarah Kunst: (32:04)
I love it. That's super helpful. And we have 10 more minutes. So I'm going to go back to asking you some of my questions but if anybody else has last minute questions. Angela is a very hard woman to get time with so this is a great time to ask her-
John Darsie: (32:17)
I've got a question, Sarah. I'm raising my hand.
Sarah Kunst: (32:19)
Yeah.
John Darsie: (32:19)
I'm raising my hand. I've got a question.
Sarah Kunst: (32:20)
[crosstalk 00:32:20]. Yeah.
John Darsie: (32:21)
What type of, for the industry, the investment management industry as a whole. What type of changes would you to see the industry make, to give greater opportunity to minority asset managers? Both women, Hispanic Americans, African Americans. I give you one example, in the NFL years ago and it's, I wouldn't say it's controversial, but it has mixed success. They instituted a rule called the Rooney Rule. Where basically anytime there was a head coach opening on an NFL franchise, you had to interview a minority candidate before you finalize the hiring of a new candidate of any race or creed. And what that did is it basically gave minority candidates experience in the interview process. And it also exposes teams to candidates they might not have interviewed, if that mandate wasn't in place. I think about that when I think about the industry about, just the lack of opportunity and credibility that are given sometimes the minority managers, just because you don't see and hear from a lot of people that look and sound like them.
John Darsie: (33:20)
But what types of things from an industry perspective, could we do better to ensure that minority candidates get the confidence and the experience needed to eventually launch their own fund, get those senior jobs at investment management firms?
Angela Matheny: (33:33)
Oh, my God. John, thank you so much for that question. First of all, the Rooney Rule. That rule is helpful to some people who want to dip their toe in the water and who believe that they can't find them. But really, I believe we can do better than that. Crewcial has certainly done better than that. To me, that's like saying, "Oh, I have this one black friend. And that's who I'm going to bring to the interview." And then that's it. I checked the box, I hire that person. But there are so many institutions that are filled with black talent, such as all of the HBCUs. And there's also hiring and sourcing from nontraditional... from Ivy League, from schools that are not Ivy League institutions. So for instance, we source a lot from city and state universities, as well as Ivy League talent because again, we want that diversity of thought, diversity of backgrounds. But what, as an ecosystem what we can do, I pointed earlier to HR and Chief, also chief diversity officers. They really, really need to speak up and work to align themselves with leadership.
Angela Matheny: (34:38)
Because sometimes, certain firms engage in nepotism or they can slip a resume in and say, "Oh, here's a friend of a friend." However that goes and that's how we see these homogenous groups in many firms. And that's how we see the wealth gap completely continuously widening. HR needs to fire their recruiter who doesn't listen to them, the same way investors are probably going to start divesting from asset managers and consultants who say... when you say you want to see a more diverse set of asset managers, that's exactly what we want to see. And it's your job to bring these candidates forward. But we have a nice, nice, really robust internship program. And one of the things that I like about Crewcial is that the entire firm is engaged in this cohort of interns that we hire each year. It's usually about 10, or 12 candidates. We want to persuade them to come into this career. Consider this career in asset management.
Angela Matheny: (35:42)
So our CIO would say we like to brainwash them to stay, but they can go anywhere they want. They can stay on the investment team, which we prefer. Or there's other opportunities in client services, and even our information technology department. But for the most part, our CIO, he has lunch with not only every single person in the firm, so you get to engage with senior leadership such as himself, myself. I take all of our interns to industry conferences with me, when they're based in New York City. All of the opportunities in New York City. Some of our industry colleagues say, "Wow, Angela, I see you have your clan with you." That's right, because they cannot be what they cannot see. And so that's so important. And so there's many recruiters, there's many diversity resources and agencies that have a wealth of talent that every single asset management firm, whether you're an allocate or an LP, you can exercise and take advantage of this talent that's out there. Like Sarah said earlier, we are not hiding. We've always been here, we want the opportunities.
Angela Matheny: (36:48)
The strange thing is, is that if you are a firm and you're not hiring diverse talent, that's why we can't see enough black hedge fund managers, enough women in hedge funds. That training and that pedigree that comes out of a lot of these shops is really, really important. Not only is it a lucrative opportunity, but if you turn the venture we're looking for that 1% GP commitment. I don't have a rich uncle that I can call up, where am I supposed to get this? How do I get in the game? You can't even compete, because you've never had those corporate opportunities. You've never had a chance to maybe get a little capital to manage a portfolio, you've never had the opportunity to engage with an executive leadership team, to get a lot of other training. So that doesn't happen. We're just not going to see enough of us in those key positions.
John Darsie: (37:43)
Thank you for that, Angela. And I'll turn the microphone back to Sarah.
Sarah Kunst: (37:46)
Awesome. Thank you. Yeah, no. All of those things I heartily cosign from what I've observed in this industry. Julia has a question. And she ask, which is kind of a funny question but it's good. And you and I've talked about this a lot, Angela. "How do you define diversity? Is it a percentage of total workforce of management? Do you guys have your own definition? Does it differ client by client? Are there any best practices in the industry or benchmarks in place for asset owners to kind of compare their diversity mandates?"
Angela Matheny: (38:19)
So two things. First of all, we define diversity Crewcial does for our clients as more than 50% equity ownership at a firm. And we prefer that equity to lie on the investment team. The founders, the co-founders. Because we believe that that is the diversity reflected in the portfolio. Those are the decision makers. And those are the outcomes that we see in a best performing portfolio. And so that more than 50% is really, really key. You can't count the black receptionist, the Hispanic person in the mail room, the people who are non investment related professionals, or even your wife who probably is not even working at the firm, or maybe a relative is working in a different capacity. It really needs to lie on the investment team.
Sarah Kunst: (39:11)
Yeah, I love that. Great. Awesome. We're almost at time, so I'm going to kind of ask you the last question here. This has been obviously the craziest year of the, I don't know, like ever. It feels like, and starting with this summer and the George Floyd protest we've seen... feels a lot of talk right? We've seen a lot of black squares. Do you feel like things are changing, right? You're the money lady. You're the one who's sitting where the actual, kind of rubber hits the road. Are things changing?
Angela Matheny: (39:44)
I hope they're changing. I hope this is not just momentum. I think that it is a very pivotal moment and I do feel as though we are turning the corner. I do feel that this is the second wave of what you might call the civil rights movement as it relates to economic opportunity. It's about time. We are here, again we haven't been hiding. And what I'm seeing is that there's a lot of client interest as it relates to diverse managers and women. And people are becoming more and more educated as to why diversity makes so much sense, and how it is our fiduciary duty as consultants to make sure we're continuously building that pipeline, across the five asset classes in which we invest on behalf of our clients. And so I think there's so many institutions focused on racial equity. Certainly nonprofit clients, it make sense for them. Students are getting involved, some are even wondering at the universities, are you investing in diverse asset managers as it relates to the investment portfolio of the university?
Angela Matheny: (40:52)
So I think young people have a huge voice. And I think that for managers with nontraditional backgrounds, particularly in venture, there's many ways to actually get into venture now. People were probably looking at traditional backgrounds, historically, you would have to go to a venture capital firm, make its partnership or have some sort of pool of capital to manage. What I love that I'm seeing, with some of the top venture firms is that they have, what do they call? They have these sources that go out. What's the terminology, Sarah? You and I always talk about this.
Sarah Kunst: (41:29)
Yes. They're scouts. I was a scout at some-
Angela Matheny: (41:29)
Scout.
Sarah Kunst: (41:29)
Yes, yes.
Angela Matheny: (41:33)
Yes. So I love that opportunity because if you have a budget to be a scout, and you can just go out and source a number of things, ideas. Things that are important to you, that you would invest with your own capital. And I've seen scouts do that, and then spin out and create their own fund, and then those top funds that gave you that budget, they can sort of cherry pick in terms of what is interesting to them. But what I love is that, they're accessing a pipeline of talent that they normally wouldn't see in their network. And so they're hiring diverse women and individuals to tap into that talent base. I think it's a start.
Sarah Kunst: (42:10)
I love it. And I agree. Well, this has been amazing. And I so appreciate, as I know everybody in this call does. You giving us your time and wisdom. And thank you so much for doing the work you're doing. And I don't care what you say, I am personally attributing every single one of those $4 billion to you. And I'm excited to see more come down the pipeline. So with that, thank you so much. I'm going to hand it back to John.
Angela Matheny: (42:36)
Thank you.
Sarah Kunst: (42:38)
Angela, thanks so much for joining us. And Sarah, thank you again for introducing us to great people. That's why we brought you on here as a moderator for SALT Talks and a member of our community. So we're very grateful for that. And again, Angela, we look forward to collaborating from a SkyBridge level, on ways that we can allocate our capital to more diverse managers because we think it can help drive improve returns. That's ultimately the goal.