“It’s not the probability; it’s the consequence. It’s not the probability when something goes wrong. It’s the consequence when it goes wrong.” – Wendy Li
Wendy Li is the co-founder and Chief Investment Officer at Ivy Invest, a fintech investment platform bringing an endowment-style portfolio to everyday investors.
Before Ivy Invest, Wendy was Managing Director of Investments at the Mother Cabrini Health Foundation, where she built the Investment Office from the ground up and managed a $4 billion portfolio. Prior to Mother Cabrini Health Foundation, Wendy was Director of Investments at UJA-Federation, investing across a broad range of asset classes. Wendy began her career in the Investment Office at the Metropolitan Museum of Art. She has a Bachelor of Arts degree from Columbia University and is a CFA charterholder.
You can find Wendy on her socials here:
LinkedIn: https://www.linkedin.com/in/wendy-li-cfa/
X / Twitter: https://x.com/askwendyli
Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.
OUTLINE:
[00:00] Intro
[02:29] Wendy’s family’s history with Columbia University
[07:55] The importance of understanding family history
[11:09] Why Wendy chose to work at The Met
[15:16] How did Wendy know in the interview that Lauren would be her mentor?
[19:18] Specialist vs generalist in 2006
[22:58] Pros and cons of using AI as an LP
[29:02] The 80-20 rule for how an LP thinks
[29:29] The one mistake EVERY SINGLE LP makes
[33:27] What is the Takahashi-Alexander model?
[39:38] Who do you learn from when your LP institution is so small?
[41:22] The wisdom of an open-sourced LP reading list
[45:34] What is headline risk?
[47:09] What does ‘uncompensated risk’ mean?
[50:20] Why now for ‘endowment-in-a-box’
[55:07] Wendy’s proudest dish from her mom’s recipe book
[57:09] Wendy’s last piece of advice
SELECT LINKS FROM THIS EPISODE:
- Ivy Invest
- The Metropolitan Museum of Art
- UJA Federation of New York
- Mother Cabrini Health Foundation
- Ask a CIO Substack
- Jane Chen
- Columbia University
- Lehigh University
- Josh Kanter
- “Inside the 100 Year Family Office” with Josh Kanter
- leafplanner
- Suzanne Brenner
- Lauren Meserve
- Takahashi-Alexander model
- The denominator effect
- Recommendations of LP investing 101 on Ask a CIO
- Pioneering Portfolio Management by David Swensen
- When Genius Failed by Roger Lowenstein
- Too Big to Fail by Andrew Ross Sorkin
SELECT QUOTES FROM THIS EPISODE:
“Where [using AI] is a challenge and can present a challenge to somebody’s development is in the utilization of these tools where perhaps there’s not an innate understanding of why the data is important.” – Wendy Li
“The pattern of mistakes that I certainly made and I saw the others make—and I know those listening and are earlier in their investor journey—will inevitably make-… We all make it. Even knowing this is a trap that we all fall into… even though they are all going to be aware of this trap, they’re still going to make the same mistake because we all do it, but we all have to learn this one and develop our own scar tissue on this one. It’s the exciting investment manager that other really smart LPs are invested with that is a ‘hard-to-access’ manager – that has a window in which they will take your capital. And there’s this sense of urgency. Sometimes real, sometimes forced. And there’s this sense that all these really smart investors are doing this thing. And the added layer on the endowment foundation side is oftentimes that there’s an investment committee member who is super excited about the investment because—and I’ll use a real quote that someone once said to me, ‘It would be a trophy manager to have in the portfolio’—and that is invariably a mistake that we all make in our investment careers. I would say that when I have been regretful of avoidable mistakes, it has had that pattern.” – Wendy Li
“I deeply subscribe to, ‘There’s always another train leaving the station.’” – Wendy Li
“There’s a great risk in being overconfident. There’s a great risk in assuming a normal distribution of events and returns.” – Wendy Li
“It’s not the probability; it’s the consequence. It’s not the probability when something goes wrong. It’s the consequence when it goes wrong.” – Wendy Li
“In-the-moment decision-making is always harder than you might remember post-mortem.” – Wendy Li