June 11, 2025
No Rules, Just Lasting Principles
When you manage capital intended to last for generations, you quickly learn that strict rules (or really any rules) don’t hold up well. Markets evolve. Situations emerge. The playbook you relied on rarely survives first contact with a new reality.
During my 15 years at Princeton’s endowment, we didn’t work off a fixed set of investment rules. But over time, certain principles emerged that guided me over time. They weren’t something we posted on the wall, and they weren’t given to me in new hire orientation when I joined on June 30, 2008. They developed during the experience; we debated, tested, refined, and lived them.
Students often ask me about these principles. Looking back, there are actually four mantras that developed from them and have stayed with me, and I’ll walk through them below.
Fewer, Better, Stronger — Lessons from the GFC
I can still picture the conference room where these lessons started to come together. It was early 2009, roughly six months in. The Global Financial Crisis hit, and the financial world felt like it was breaking apart. Liquidity was tight, to say the least.
The conference room itself reflected the times. Dingy carpet held together with duct tape, an old wooden conference table with splinters sharp enough to catch your tie, and chairs with stuffing poking through the fabric. We had plans to renovate the office, but like a lot of things back then, those plans went on hold when the crisis hit.
Around that battered table, we weren’t fine-tuning models. Frankly, we felt like we were triaging. Annual meetings with managers were piling up. Distribution notices were not coming in, and quarterly valuations were heading down rapidly. We were staring at a massive roster of private equity and venture capital managers added to the portfolio during the pre-crisis boom.
Diversification on our manager roster wasn’t protecting us. Indeed, it was making our job more challenging. What started to matter far more was who we most trusted. Which managers were transparent, steady, pragmatic? Who communicated openly about the challenges in their portfolios and their teams? Who took partnership seriously, not just when things were good, but when times were tough?
We started to realize that having more managers didn’t make us safer. If anything, it diluted our attention and spread us too thin across relationships where we lacked real conviction. That’s when we began saying, almost as a mantra inside the office: Fewer, Better, Stronger.
We weren’t looking for more names on a manager roster. We were looking for deeper partnerships with managers whose judgment we trusted, whose values aligned with the university, who took appropriate risk, and who could navigate complexity. Fewer relationships meant we could go deeper, be true partners with our managers, have real conversations, and build durable trust over time.
Yes, this meant we were concentrated with just a few managers. However, we managed that risk not by adding more managers, but by making sure that the managers we backed were themselves building portfolios in companies where they had their strongest conviction, in a manner with how they would invest their own capital, free from the constraints and pressures of typical private equity fund structures.
Fewer, better, stronger partnerships would anchor our investment philosophy for the next 15 years.
Who Matters More Than When — The Rebuild Years
As markets stabilized, we started to rebuild. The office finally got its renovation! The splintered table was replaced. The chairs were new. Though, in true university fashion, the HVAC system never quite worked right; the conference room was always freezing or overheated, and our operations team was constantly fighting with the contractors to get it fixed.
In one of those post-crisis PE asset class meetings, with everyone bundled up against the conference room cold, we found ourselves in a familiar allocator debate: commitment pacing. Several of our managers were back in market raising new funds in the same year, but we projected the next year as light.
Someone posed the question: “Shouldn’t we smooth our commitments? Stick to a steady annual pace?”
It was the kind of question every allocator confronts. On paper, even pacing feels prudent. It looks disciplined. It satisfies models and can be easily explained to the Board.
However, we soon saw the problem: managers don’t raise capital based on our models and consistent pacing. The best managers raise when they see opportunities at a size that matches the opportunity set. They raise when the last fund is almost out of dry powder, when their pipeline is strong, and not when it fits neatly into our vintage year pacing spreadsheet. Forcing artificial evenness risked missing confidence-inspiring funds simply to satisfy a spreadsheet. Or, perhaps worse, it risked forcing money to work when there was a dearth of attractive funds out raising.
We shifted. Rather than enforcing rigid pacing, we began using a moving average over several years, roughly mirroring the typical fundraising cycle of private equity and venture funds. That gave us some structure, but allowed flexibility to commit when strong managers came to market and pass when they didn’t.
We finally figured out that who you’re backing matters more than when they happen to be raising.
We could live with lumpier commitment schedules if we were sticking with the right people. Manager quality drove pacing rather than calendar math. Who Matters More Than When.
Build Value in Private Markets — Boom Times and Quiet Caution
By 2013 and 2014, the crisis was behind us. Private markets and venture capital were humming along well. Funds were growing in size, and companies were raising larger rounds. Multiples were expanding. Leverage was cheap and abundant. Almost everyone looked smart.
I recall a meeting in Chancellor Green, an octagonal building adorned with intricate woodwork and stained glass. The space, rich in history and architectural beauty, served as a poignant backdrop to our discussions on the endowment.
On that day, in this 19th-century sanctuary of learning, we sat listening to one of the world’s leading authorities on a new technology that would potentially reshape finance: Bitcoin. The professor walked us through the cryptographic principles, the blockchain architecture, the implications for monetary systems. Here we were, surrounded by stained glass, grappling with the most futuristic of technologies.
After the presentation, as we returned to discussing the investment environment during a post-meeting reception, attendees were expressing gratitude for how the endowment had recovered and was performing. But beneath the optimism sat a quiet, shared question: what happens when these good times inevitably end?
Strong markets create success stories that aren’t always durable. Leverage amplifies returns, until it doesn’t. Multiple expansion makes managers look brilliant, until prices stop rising. It’s easy to mistake a rising tide for investing skill.
Inside the team, we focused even harder on where real value was being created.
In private equity, we leaned into managers who were true business builders, operators improving margins, driving organic and add-on growth, transforming operations. We avoided funds that relied primarily on financial engineering. When leverage is cheap and multiples are expanding, many show paper gains. But when more challenging or simply muted times come, operational improvements endure and make the companies more resilient.
In venture, we concentrated on early-stage managers who partnered with founders when companies were still being built, when venture capitalists could genuinely impact strategy, help recruit talent, open doors. We were cautious of late-stage venture. While there are some very talented managers who continue to add value at this stage, others are riding momentum.
The best early-stage VCs we backed weren’t just writing checks. They were helping founders navigate from product-market fit to scale, from technical innovation to commercial success.
We weren’t trying to time liquidity. We were giving talented managers the space to build companies over many years. Of course, that only worked if we stayed disciplined about sizing, pacing, roster size, and manager selection.
Private markets, done well, became the compounding engine of the endowment. To us, “done well” meant backing managers who created real value, not those riding cheap financing, expanding multiples, or momentum. Build Value in Private Markets.
Invest Well to Do Good — Navigating Pressures
As the endowment grew, a new kind of pressure emerged.
I remember one particular morning walking from my family’s apartment in Princeton to the office. It was a route I took almost daily, cutting through Palmer Square. However, this morning, a flyer taped to a lamppost caught my attention.
The flyer called out PRINCO directly for its investments in fossil fuels. The language was pointed. We’d seen debates like this emerging nationally, including on our campus over the years, but seeing it plastered in our home town square felt personal in a new way.
Inside the office, these conversations around outside pressures were becoming more frequent. Select students, alumni, faculty, and advocacy groups were calling for the university to divest from fossil fuels, and increasingly from other sectors and geographies as well.
These weren’t easy debates. They rarely are. The core questions were challenging: What is the role of the endowment? Should the portfolio reflect moral judgments, and if so, whose? Should we use capital to take positions on social and political debates? How does the concept of intergenerational equity play into these debates?
As we worked through these conversations, we kept returning to a principle that had always grounded our work: strong investment performance gives the university maximum flexibility to pursue its mission over time.
The endowment existed to fund financial aid, faculty research, academic programs, new fields of study, and the intellectual life of the university itself across generations. The stronger and more resilient the endowment, the more Princeton could invest in students, expand access, and fund groundbreaking research, including research tackling the very societal challenges that animated many of the divestment debates.
As the university would later state publicly, Princeton believed that its greatest contribution to improving the world’s future would come not from reallocating the endowment’s holdings, but through the scholarship, teaching, and research of its faculty and students.
Our role as investors wasn’t to answer every political or moral debate directly inside the portfolio. It was to ensure that Princeton had the financial strength to serve its mission for generations. Invest Well to Do Good.
Closing Reflections
These mantras weren’t handed to me in an orientation session in June of 2008. They were learned through debates, cycles, mistakes, crises, recoveries, and conversations around conference tables over many years.
Sometimes those conversations happened around a splintering table during the worst financial crisis in generations, and sometimes under stained glass filtering the light of new technologies. The setting changed. The work remained.
The HVAC never worked right in either room, too cold, too hot, pretty much never comfortable. Perhaps, that was fitting, as good investing shouldn’t feel too comfortable; comfort can breed complacency.
Sometimes the hardest debates weren’t in conference rooms at all, but encountered on a morning walk, a flyer on a lamppost forcing you to confront why you are doing all this work and what it means to broader society.
Durable principles, ones that help you make sound decisions, simple ideas that you can use as mantras when things get complex, that’s where real investment judgment lives.
These principles are not unique to endowments. Any allocator managing capital across generations faces these same challenges: balancing the needs of today with obligations to tomorrow, navigating from crisis to boom times and back again, confronting not just financial questions but moral ones.
The rooms change. The tables get replaced. The temperature is never right. However, the principles, the mantras, endure.
Disclaimer
The views expressed are solely my own and do not represent those of Princeton University, Boston University, or any organization with which I am or have been affiliated. Details have been simplified for clarity. This essay is for educational and informational purposes only and isn’t intended as investment, tax, HVAC, or legal advice.
