Dorothy in conversation with LPs #2

As part of SuperReturn’s new series of interviews with LPs, Dan Parker, Deputy Chief Investment Officer at Texas Tech University System - Office of Investments, speaks to Dorothy Kelso, Global Head of SuperReturn, about his career, how he spends his time, and what advice he would give to an organisation looking to invest in alternative strategies.

Dorothy: Where did you start your career?

Dan: I began my career as an officer in the US Marine Corps. This provided me with a unique combination of leadership responsibility, making decisions in complex, high-risk, rapidly-changing environments, as well as significant international experience (I spent three years deployed in Asia leading an elite unit and have visited every continent except Antarctica). After being promoted out of that unit, I obtained an MBA, and then spent a decade working in New York at a bulge-bracket investment bank, direct PE at a premier asset management firm and as a senior allocator at a large private foundation, before relocating to Austin, Texas, to serve as Deputy CIO for Texas Tech University’s endowment.

Dorothy: What does your typical working day involve?

Dan: One of the challenging features of this role is that it’s hard to define a “typical day”. It’s probably easier to describe a few responsibilities, since any day will normally involve some combination, based on prioritisation and timing. I work closely with our CIO on policy, strategy, asset allocation, processes and budgeting for the portfolio, as well as managing and leading the investment team and engaging with stakeholders within the TTU System (Investment Advisory Committee, Regents, University Presidents, etc.) These topics are typically dealt with less frequently than the day-to-day portfolio management functions, but when they crop up, they’re the top priority.

Monitoring the current portfolio involves interacting with managers and service providers to ensure that we’re on top of current exposures and can be proactive, not reactive. Optimising the portfolio is a continuous process and entails both research and due diligence on managers as well as a range of asset classes and/or strategies which may not be in the current portfolio, but may be considered (including direct and co-investments). Finally, it’s not New York, but being based in Austin offers the opportunity to build and maintain relationships with senior investment professionals from both local peer institutions and investment managers who are either based locally or in town for meetings.

Dorothy: What do you do in your spare time?

Dan: My top priority when I’m not at work is spending time with my family. In addition, I enjoy reading a wide variety of topics (mostly non-fiction) and exercise. Even though this role involves significant travel and my kids are young, I also enjoy travelling with my family – so far the kids have been to 22 US states and one foreign country (Italy).

Dorothy:  That’s a lot of travelling! What have you seen recently on LinkedIn that stood out?

Dan: One of my favourite things about the internet is the opportunity it provides to follow and learn from experienced, successful investors through a variety of social media channels including LinkedIn. Recently, I’ve enjoyed Ray Dalio’s posts from “Principles.”

Dorothy: What advice would you give to an organisation looking to invest in alternative strategies (hedge funds, private equity, venture capital, etc)?

Dan: With the sustained rise in asset prices since the global financial crisis of 2008, consensus estimates of forward-looking returns to beta from where we currently stand are below the required rates of return for many asset owners, specifically including pensions, endowments and foundations. One result is that alpha will likely need to provide a higher proportion of total portfolio return than may have been necessary previously. This implies changes in asset allocations, which are likely to prove inadequate unless accompanied by the appropriate evolution of governance and staffing. Asset owners need to attract and retain staff with private sector investment experience in alternative strategies, and create governance structures that empower them to operate at the scale and pace that global capital markets require.

Dorothy: It’s been a real pleasure speaking with you Dan, thank you.

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Under the spotlight: Dan Parker

Dan Parker has been Deputy Chief Investment Officer for Texas Tech University – Office of Investments since 2016. The Office manages all areas of investment for the Texas Tech University System and its four component institutions. The Texas Tech University System’s endowment currently approximates $2.0 billion. Prior to joining Texas Tech University, Dan worked at Helmsley Charitable Trust.