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On the money: New CIO brings competitive spirit to investing
Matthew Pozel
Senior Multimedia Writer & Producer, Public Affairs Kauffman Foundation
Matthew Long
Senior Video Producer, Public Affairs Kauffman Foundation

New chief investment officer brings competitive spirit to investing

Why investments matter

Private foundations are funded by an individual, family, or corporation to make grants to public charities, and sometimes conduct their own charitable activities. The Kauffman Foundation was established by Ewing Kauffman, who provided its entire initial endowment. That money has been invested and has grown through the years. Because private foundations are established for charitable purposes, they are required by the IRS to make an annual distribution equal to roughly 5 percent of their prior year's average net investment assets. With that in mind, the better a foundation's investments perform, the more money is available to support meaningful charitable endeavors each year.


On the money

In the vast depository of e-mails that have flowed to and from the Kauffman Foundation through the years there is a routine exchange from the fall of 2012.

On an evening in October, Mary McLean, the Foundation’s chief investment officer, received a note from an accomplished investment advisor working in Santa Monica, California. Lisa Murray explained that her family was moving to the Kansas City area and she hoped to get advice as she began her job search. Early the next morning Mary responded. They met for coffee a few weeks later and within months, Mary invited Lisa to join the small team of Kauffman associates charged with handling the Foundation’s investments.

"We had an opening on our team so Lisa’s timing was really wonderful and her experience lined up so nicely to give her a broader view of the industry. Plus, she’s just a great person," Mary said.

"I was attracted to the mission of the Kauffman Foundation. I think it's incredibly important. So, I thought I'll give it a shot," Lisa recalled. "I was so excited and kind of surprised when she responded. But when I got to know Mary, I realized she takes the time to help people."

Stepping up

This month it is Mary who is moving on, retiring after a distinguished 20-year affiliation with the Foundation. And five years after sending her out-of-the-blue, late-night email, Lisa is stepping into the role of chief investment officer where she will oversee the Kauffman Foundation’s globally diversified $2 billion portfolio.

"Mary has been instrumental in helping to craft our investment strategy and guiding its implementation. Along the way, she's been a mentor to Lisa," said Wendy Guillies, president and chief executive officer of the Kauffman Foundation. "The Investment Committee of the Board of Trustees and I have absolute confidence in Lisa's ability to take the reigns from Mary."

"If there's a job to do, Lisa is going to do it well. She's engaged and devoted to giving back to the community," said Eric Levene, a Kauffman investment analyst who works with Lisa. "She’s an unstoppable force."

That force was honed on the ice rink where Lisa spent hours as a girl, first practicing the precise lines and athletic leaps of figure skating and then moving to the brutal ballet of ice hockey.

"Work ethic and focusing on always getting better were things that my parents taught me from a really young age," Lisa said. "I'm used to keeping score, working together as a team, trying to win."

Goal-oriented

Hockey fed her competitive nature and team instincts, and she excelled at the sport. Lisa earned varsity letters in each of her four years as an undergrad at Princeton. With Lisa serving as the team’s captain the Tigers were nationally ranked and set a new school standard by recording back-to-back 20-win seasons. At the end of her college career Lisa earned an invitation to the U.S. Olympic Festival. She also achieved at a high level in class where was a three-time Academic All American at Princeton and went on to Harvard to earn her MBA.

The team approach will be important to Lisa as she captains the Foundation’s investments. "Working in the investment portfolio, you have a team and the market gives you your score on a daily basis," she said. "It's definitely a competitive, team-oriented job and I love the idea that the better we perform, the more money goes out in the community through our grantees."

Sophia Garcia, a postsecondary retention specialist for Kauffman Scholars, is struck by Lisa’s interest in the Foundation’s education initiatives. "Lisa is a down-to-earth person who brings poise and a quiet command to her work. She’s particularly interested in our efforts to support education and wants to be engaged in programs that make our community a better place."

Keeping score

In Lisa's opinion, looking to the scoreboard could help shift the demographics for the industry where the investment community can be seen as an old-boys network.

"It's a great career for anybody, but I think women can be drawn to it because it offers the ability to get recognized by the results you generate. If you have the returns, it shouldn't matter if you're a man or a woman."

During her ice hockey games, Lisa remembers her dad encouraging her to heed the advice of the sport’s legendary Wayne Gretzky, who said, "I skate to where the puck is going to be, not where it has been." Great advice if you hope to stay a step ahead of the market.

"I'd say the two hallmarks of our strategy are relying on the equity markets for our growth and trying to keep it simple," Lisa said. "We want to invest with smart people that can go where the opportunities are."

Invested interest

Mary McLeanMary McLean speaks in measured tones that reflect both her demeanor and approach to the market in her parting thoughts as she closed out her career with the Kauffman Foundation.

Q: How do you describe the investment approach of the Kauffman Foundation?

A: We have a well-defined style and a coherent set of beliefs that we know we can rely on when things get rough. Governance here has been great. The Investment Committee allows us to ride the ups and downs of individual managers and market conditions by holding steady to our long-term investment strategy. The other thing I would say is that we rely on our external partners to perform. We’re comfortable standing back and letting them be the stars. I’d be a nervous wreck if I was looking over their shoulder and questioning their performance on a week-to-week basis.

Q: How does the investment team fit within the culture of the Foundation?

A: We have the benefit of a collaborative culture where people push each other to a higher standard while also supporting each other. I think of the investment function as back-office support. We just try to make it possible for the rest of the Foundation to do its thing to advance education and entrepreneurship.

Q: Where do we stand on creating opportunities for women and minorities to take leading roles in investment industry?

A: That’s an important objective. You’re going to make better decisions when you bring different points of view to the table. The industry is moving to bring more women and minorities into the field, but it needs to move more. It starts with creating the wide funnel to bring a diverse group of bright young people into the industry.

Q: How do you think about risk?

A: Having done this for a number of years you become very aware of the mistakes you’ve made along the way. And there’s a natural tendency to say ‘I’m not going to that that again.’ You can’t be reckless, but you have to be careful that those battle scars don’t limit your perspective and options when you think about the best approach to take.

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