How I Invest with David Weisburd

E154: How a First-Generation Immigrant Became a Top CIO: Paul Chai's Story

Apr 11, 2025
Guest
Paul Chai
In this engaging discussion, Paul Chai, Chief Investment Officer of the Kansas State University Foundation, shares his remarkable journey from first-generation immigrant to managing a $1 billion endowment. He reveals how his background shaped his investment philosophy and why Kansas State focuses on supporting emerging managers. Paul dives into tactical investment strategies, including a successful TALF 2.0 trade that yielded 8% in just six months. He emphasizes the importance of relationships in asset management and discusses how small hedge funds and lower middle market buyouts can lead to outsized returns.
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INSIGHT

Target Return and Components

  • Kansas State's target return (7.8%) covers annual distributions (4.3%), fees/expenses (1.5%), and long-term inflation (2%).
  • They aim to exceed this target while managing risk effectively.
ADVICE

Increasing Returns

  • Increase returns by tactically adjusting asset allocation, investing in non-traditional strategies, and capitalizing on market dislocations.
  • This requires flexibility and a nimble approach.
ADVICE

Preparing for the Next Trade

  • Don't try to predict market dislocations, but be prepared to act when they arise.
  • Partner with fund managers who can identify and notify you of such opportunities.
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