Swimming with Allocators · Earnest Sweat, Alexa Binns

How Institutional Investors Think and What Emerging Managers Must Know

·43 min·3 clips

Early-stage venture is a long-term asset class where returns may not show up until year seven or year eight.

1. Swimming with Allocators speaks with Wendy Lee about institutional investors, early-stage venture, and how emerging managers can work with LPs. 2. Wendy Lee is the co-founder and CIO of Ivy Invest, and she previously served as managing director of investments at Mother Cabrini Health Foundation, which has over $4 billion in AUM. 3. The episode asks how institutional investors think, why early-stage venture matters, and what emerging managers should know before raising from LPs. 4. Lee says she did not grow up around financial services, and she learned about capital markets after joining Columbia and then being recruited by the Met Museum for its first investment analyst role. 5. She says the Met Museum role introduced her to endowment and foundation management, which she describes as very different from the banking and consulting paths recruiting on campus. 6. Lee says her early career was shaped by working at the Met Museum before, during, and immediately after the global financial crisis. 7. She says endowments and foundations were still a cottage industry when she started, and small teams made it common to be a generalist. 8. Lee says that generalist background taught her to view every investment in the context of the full portfolio and the competition for capital across asset classes. 9. She says she gravitates toward private asset classes because they allow GPs and LPs to make constructive changes to companies, balance sheets, and business strategy. 10. Lee says Ivy Invest was created after her two co-founders approached her with a problem: individual investors do not have portfolios that look like endowments and foundations. 11. She says that gap affects both the investments available and the outcomes those investments can generate, including how portfolios may behave through periods of stress. 12. Lee says the GP-side tailwind is the growth of wealth channels, including advisors, individual investors, and wire houses, which has pushed managers to build brands and educational content around alternatives. 13. She says that reaching those channels requires different answers on structure, education, and how to bring the advisor and the end customer up to speed. 14. Lee says Ivy Invest tries to make the individual-investor experience feel familiar through a UI comparable to Betterment or Robinhood. 15. She says the same firm also tries to look and feel like an institutional LP to GPs because Ivy Invest is the sole LP to the funds it accesses. 16. Lee says venture education matters because early-stage investors should expect real returns and results only around year seven or year eight. 17. She says LPs must be willing to underwrite venture without immediate proof points, and she warns that choosing the right LPs matters for building a sustainable multi-fund firm. 18. Lee says a bad second fundraise can force a manager to start over from scratch and answer why existing LPs are not returning. 19. The episode stays interview-driven and practical, with Ernest Smith pressing Lee on portfolio construction, institutional governance, and the mechanics of LP selection. 20. Listeners who follow venture fundraising, allocator behavior, and emerging managers will get the most from it, while people avoiding LP strategy and portfolio-structure talk may skip it.

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