2021 Knowledge Brokers

Natalie Eckford

Natalie Eckford has 20 of experience as an investor and has been with Cambridge Associates since 2006. As a managing director at the firm, she currently works with a range of nonprofit clients, including schools, foundations, and museums ranging in size from $70 million to more than $7 billion. In addition to the traditional oversight of portfolios, Eckford’s engagement with clients has included developing and implementing private investment programs, integrating mission-aligned and impact investments, and increasing the number of diverse managers in portfolios.

Prior to Cambridge Associates, Eckford  spent time as a financial analyst with MCI/WorldCom and within Merrill Lynch’s Real Estate Investment Banking Group. While in business school, she divided her time between internships with BlackRock Realty Advisors’ acquisitions team and the real estate investment team at the California State Teachers’ Retirement System (CalSTRS). At BlackRock, she evaluated opportunities for equity acquisitions in development, stabilized, and value-add investments for the firm’s real estate portfolios. At CalSTRS, she performed due diligence, research, and valuation analysis for potential investments in the plan’s real estate portfolio.

She has a Master of Business Administration from Harvard Business School and a bachelor’s in economics from Spelman College in Atlanta.

CIO: What new qualities do you look for in a manager/service provider given the pandemic’s financial and economic impacts? 

Eckford: Many of the qualities that were important prior to the pandemic, such as alignment with investors and a demonstrated investment edge, or focus, continue to be key for me. I think in the era of macro factors driving markets and manager performance in recent years, these qualities were maybe perceived as less important, as the market wasn’t necessarily rewarding managers for this discipline. However, in the first quarter of last year, we saw why these qualities matter. These managers were able to evaluate and support the capital needs of each of their underlying portfolio companies through the pandemic in a hands-on way. Their sector-specific depth of knowledge also allowed these specialist general partners to invest further with companies that they knew could manage through or even grow in the dislocation and benefit substantially from the subsequent rally.

Another manager quality—diversity of team, while not new, has become more widely embraced over the past year. While the industry has long accepted that diversification of asset classes, sectors, and other factors is beneficial for a portfolio, the pandemic has brought to the forefront the benefit of team diversity. At Cambridge Associates, we believe that strong investment performance depends in part on the diversity of ideas, backgrounds, and experiences of the managers with whom we invest on behalf of our clients. Over the past year, managers have become more receptive to questions about their commitment to diversity both in hiring and in the development of practices to build an inclusive environment to give a voice to these diverse individuals. Currently, nearly 60% of our global client base has some level of investment in diverse managers, and I expect to see this percentage continue to grow in the coming years.

CIO: What changes are you making to your asset allocation advice?

Eckford: I have been increasingly incorporating more sector- and sub-sector-focused specialists into client allocations, including using crossover funds that blur the lines between public and private asset classes. Examples include a small-cap, value-oriented manager in biotechnology, a China manager focused on just a handful of industries, or a small manager-focused segment within digital infrastructure. These managers tend to be smaller, with niche areas of deep expertise that allow them to identify opportunities that fall between the cracks of their larger generalist peers. Also, pricing tends to be more reasonable given less competition for these investments. In having more managers that don’t fit neatly into one asset class or sector, it requires that I review asset allocation through a number of different lenses on a look-through basis with clients, since exposures may not be able to be discerned from a traditional view.

CIO: What do you think will be the biggest innovation in your industry in the next 10 years?

Eckford: There are a number of exciting innovations that are driving massive shifts in our world right now, including the digital transformation, advancements within genomics, and blockchain. The pandemic has only seemed to further drive forward the pace of progress and adoption of these areas, and each of them has the ability to disrupt just about every sector.

The pandemic has also highlighted—and in some ways validated—the role of sustainability, environmental, social, and governance (ESG), and impact investing in portfolios as investments that can generate top returns across a market cycle. Gone are the days of cleantech 1.0 or just divesting from “sin stocks.” We are experiencing an integration of sustainability and impact from both an opportunity and risk lens across portfolios, and the opportunity set of experienced managers is growing in every asset class, including some of the more traditionally resistant asset classes such as real assets. Investors are also able to customize their portfolios to focus on their areas of desired impact, from carbon neutrality to social equity. While these investments aren’t new, I think the opportunity for the investment industry to truly incorporate this lens in every aspect of how we invest portfolios could be one of the biggest innovations in our industry over the next few years. According to a recent survey, it seems that our clients are already rapidly adopting these strategies in a very holistic way.

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