A Conversation With Jason Safran, Texas Christian University’s New Chief Investment Officer

Jason Safran

With over 20 years of experience in institutional investing and nine years of experience as a member of Texas Christian University’s endowment staff, Jason Safran said being named CIO of TCU’s $2.4 billion endowment fund was his “dream opportunity.” His connection to the school is also personal—he graduated from TCU in 2001.

“Especially when it’s your alma mater, there’s just that satisfaction of investing for the students,” Safran said. “A strong, healthy endowment helps us better support our students, people, and programs, and helps make TCU more accessible to the next generation of Horned Frogs.”

TCU’s investment strategy generally follows a time-tested approach that focuses on value and cash flows, according to Safran. The endowment breaks down its asset allocation by risk, aiming for 60% return-seeking investments, 22% consistency-focused investments, 10% enhanced investments, and 8% inflation-hedge investments. Each of those allocation categories includes a broad range of asset types.

“Within our return-seeking portfolio, all of those strategies are competing for capital,” said Safran. “The public market strategies are competing for capital with our hedge funds, and our hedge funds are competing with our private equity investments, and so on.”

This is part of TCU’s overall generalist investing strategy, which allows staff members to focus on multiple different types of investments as opposed to specializing in solely one type of asset class. Safran said this model has worked well for the university so far.

“We’re going to continue to keep a generalist staffing model here at the endowment, because we see that as the best path forward to being an opportunistic investor that can take advantage of market dislocations with our nimble size,” Safran said. “The approach has allowed TCU to find high-conviction strategies that often do not fit neatly into typical allocation buckets.”

While Safran isn’t looking to make any major changes in overall strategy, he did name a couple of programs that he sees as having potential for further developments.

“The two big areas of opportunity for TCU are with our co-investment program and our cash flow portfolio,” he said.

Co-investment refers to a type of arrangement in which an institutional investor is allowed to invest directly into a company without paying a management fee.

The cash flow portfolio involves recurring contractual income, such as dividends, and does not require a transaction to realize gains.

“Since that income is not being driven by transactions, it provides this stable and recurring source of cash flow to TCU,” said Safran. “By having that portfolio in place, there’s less of a reliance on transactions and harvesting within our return-seeking strategies in order to meet our payout.”

TCU’s endowment team is also trying to be mindful of inflation. The portfolio already has 8% allocated to inflation-hedge strategies built in, mostly focusing on real assets and other strategies that work well in inflationary environments. But that’s not the only place where TCU is trying to take the current environment into account.

“For example, within our consistency portfolio, we’ve placed a greater emphasis on cash flows that are being generated by collateral-based assets,” Safran said. “Collateral-based assets have the potential to be re-rated higher if inflation remains elevated.”

Overall, however, TCU is most focused on maintaining its position as a successful long-term investor that can use its endowment to create more opportunities for its students.

“The goal is to maintain a long-term orientation,” Safran said. “That’s the foundation to enduring success as an investor—and positions TCU for growth and sustainability for our next 150 years.”