Interview, Fireside Chat
How LPs Allocate to Venture in 2026: What They Want, What They Don’t | Baylor University CIO
- Anticipates demographic declines over the next 10 to 15 years reducing high school student populations and compressing tuition dollars, necessitating greater reliance on endowment distributions.
- Plans to reorganize investment approaches over the last five years to improve upside market performance while managing equity beta via convexity allocations over the next three to five years without normalized theta costs.
- Maintains a target private allocation range of 35 to 55 percent with a 45 percent baseline, allowing increases to 51 or 52 percent during downturns to prevent forced selling.
- Intends to wind down real asset strategies over the next five to six years to focus exclusively on venture capital, growth equity, and buyout strategies while increasing exposure to newer venture capital firms.
- Adopts a "laddering" return strategy with liquidity expectations spanning one to ten years to support capital velocity rather than simple returns.
- Expects private fund terms to lengthen to 15 to 18 years, creating a preference for compounding capital in shorter vehicles to maximize multi-year returns.
- Holds no current direct exposure to SpaceX or OpenAI but maintains approximately 2.5 percent of the endowment in Anthropic.
- Plans to actively manage public positions arising from private investments rather than automatically liquidating them, based on asset profile and size.
- Projects biotech to be more impactful over the next 10 years than the preceding 20, with plans to increase spending and exposure in the sector.
- Foresees reaching a growth inflection point for the office between one and five billion dollars over the next two to three years.
- Predicts data center sites with existing power and permits will become significantly more valuable due to constraints, with specific sites appreciating 50 percent in six months.
- Anticipates continued permitting pushback in the US and the UK driven by citizenry concerns, while planning allocations to European long-short managers as a geopolitical hedge.
- Plans to increase private equity sponsor allocations toward private credit after reducing energy exposure when crude exceeded $100, while avoiding direct private credit due to perceived off risk-reward profiles.
- Expects software to remain the primary AI delivery mechanism in vertical industries rather than being displaced, citing reliance on trusted providers.
- Views public markets as irrational but more legitimate than private markets due to the volume of participants, while noting private manager marks may be more conservative with 60 to 90 percent gains pre-exit versus 30 to 50 percent in the broader market.
- Expresses high regard for Brown University's risk-return profiling and acknowledges difficulty accessing the largest post-billion-dollar funds like Benchmark.