According to ILPA Institute Faculty Member Andrea Auerbach, Global Head of Private Investments and Partner at Cambridge Associates, the biggest day-to-day challenge for investors today is paying attention to industry developments while it simultaneously matures and evolves.
In Andrea’s classroom, particularly the ILPA Institute Portfolio Construction course, these conversations are front and center, with LP peers working through solutions for day-to-day challenges in real time.
As a long-time faculty member, what inspires you to continue teaching at the ILPA Institute?
No inspiration needed! Where else can Limited Partners get in a room and discuss, debate, and talk out all the key portfolio and market issues of the day in a classroom setting? I cherish the chance to be able to work through classic concepts while also testing different concepts and emergent trends with the class. Being able to facilitate those discussions and get the room talking and sharing their experiences, perspectives, and knowledge to unpack and determine possible solutions for real world private investing challenges is incredibly invigorating. No class is the same and yet the quality and caliber of discussion has always been high over the many years I have been teaching. It’s been such a privilege to be part of the ILPA Institute.
What do you see as the biggest challenge for LPs to be aware of in this area of Portfolio Construction today, and how does the course address that?
As ILPA Institute participants who have taken the Portfolio Construction class have heard me say in every class, the private investment arena is only forty-something years old and constantly evolving; the biggest challenge we have as active investors is paying attention to broader industry developments while the industry itself continues to mature, then determining what adjustments are necessary in light of this evolution to earn the desired return. Essentially, in building private market portfolios, we are trying to hit a moving target in more ways than one, and as investors, we have to be aware of the levels and layers that are in motion, far beyond basic portfolio construction concepts.
The Institute’s Portfolio Construction class not only provides all the basic concepts one would expect but also introduces and discusses many real-world situations and developments we encounter as private investors. Participants are asked to critically think through these scenarios and work towards recommended approaches together in a classroom setting. It’s all in service of having participants leave more prepared for their next portfolio construction challenge (or opportunity!) than when they came in.
