Improving Alpha: Innovation in Investing, ESG and Technology Improving Alpha: Dave Morehead on Driving Convex Investment Strategies for Endowment Innovation
Institutional investors continually seek top-tier managers, relying on insights, industry signals, and rigorous due diligence led by expert portfolio teams before committing any capital. While these preliminary drivers are widely adopted and can often contribute 100 to 300 basis points above relevant benchmarks, the pursuit of above-average alpha remains relentless. Could convex alternative investments help add alpha to a university, library, hospital, pension, or endowment system?
The Improving Alpha podcast is pleased to welcome Dave Morehead, CIO, Baylor University. In this episode, Michael Oliver Weinberg chats with Dave about his journey in the world of marketable investments, while sharing allocator insights that have defined his 15-year tenure managing Baylor University’s endowment.
Key takeaways from Dave’s discussion include:
- What was the evolution of Baylor’s endowment, now valued at $2.3Bn, coming out of the global financial crisis and the steps needed to stabilize its future?
- Why is there less focus on a hard percentage return target for Baylor and more emphasis placed on strategic internal goals?
- Tweaking the traditional diversification strategies that many endowments use today in order to diversify the means by which alpha is created.
- How data center and marina investments play a role in Baylor’s convexity investment approach.
- Baylor’s triangulation approach in combining the quantitative with qualitative manager checks and character assessments in order to more effectively avoid red flags in investing.
- Why the institutional investment market can kneecap you when you make assumptions on manager purity and humility prior to an allocation decision.
- Lessons learned about portfolio risk, organizational structure, and mentoring the next generation of investment professionals.
- And more.
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About Our Guest:
Dave Morehead joined the Baylor University Office of Investments in 2011 and currently serves as the Chief Investment Officer. From 2019-2024, Mr. Morehead co-taught the Large Cap and Small Cap practicum classes at Baylor’s Hankamer School of Business. Previously, he was a senior portfolio manager at Lotsoff Capital Management, where he managed securities across the corporate capital structure, and a partner at Highview Capital Management, where he focused on public and private energy investments.
Prior to this, he was a portfolio manager at Ritchie Capital Management, responsible for a generalist corporate relative value and distressed portfolio and spent time performing equity research on the transportation/logistics and specialty retail sectors at William Blair & Company.
Mr. Morehead also held roles at Bank of America, where he was responsible for the risk management of the bank’s interest rate derivatives desk, and First Trust Advisors, where he advised community banks on their investment portfolios.
Dave graduated summa cum laude from Wheaton College and earned his MBA in finance and entrepreneurship with honors from the University of Chicago Booth School of Business. He also holds the Chartered Financial Analyst (CFA) designation.
The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of Vidrio Financial, and/or our host, Michael Oliver Weinberg. The Content has been made available for informational and educational purposes only. The Content is not intended to be a substitute for professional investing advice. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.
The release date may not correspond to the recording date.