Senior Decision Makers: Luis Laboy, Hewlett Foundation (EP.512)

Episode Summary

Executive Summary: Luis LeBoy, Director of Public Equities at the Hewlett Foundation, traces how a contrarian, politics-shaped upbringing and decades in emerging markets evolved into a disciplined LP mindset. He explains how market structure has changed, why portfolio construction must adapt dynamically, and how his Everest marketing experience sharpened his manager-selection process at Hewlett.

Main Topics: Upbringing, contrarianism, and early political instincts (Priority: 5/5): LeBoy’s large, debate-filled family dinner table and childhood fascination with politics taught him to value dissent, listen carefully, and develop views that add something different rather than echo consensus. Career origin in economics and emerging markets (Priority: 5/5): He started in mechanical engineering, switched to economics after a formative class, and launched his career in Mexico and emerging markets, where political and macro analysis matched his interests. Lessons from Everest Capital: decision-making and performance (Priority: 5/5): At Everest, he learned to prioritize making money over being right, gained exposure to multiple asset classes, and experienced the cadence, incentives, and culture of a high-turnover hedge fund environment. Transition to Hewlett and LP portfolio construction (Priority: 5/5): Moving from direct investing to an institutional portfolio required recalibrating decision cadence, deepening research, and shifting from stock-picking to manager selection and portfolio construction across a concentrated book. How Hewlett selects managers and manages exits (Priority: 5/5): The team uses structured criteria, a 'kill list,' and a core/next-generation portfolio split to balance exploiting existing winners with exploring new ideas, while avoiding buzzword-driven or purely performance-chasing decisions. Changing market structure and opportunity sets (Priority: 5/5): LeBoy argues that the old emerging markets vs. developed markets framework is less useful because geopolitical, policy, and social risks now affect most markets; the key is identifying disruption risk and adapting dynamically. Personal interests, communication style, and advice to allocators (Priority: 4/5): He discusses Formula One as a strategic obsession and emphasizes that young allocators should borrow broadly from others but ultimately build an internalized, authentic framework of their own.

Key Arguments: Contrarian family and political debate trained him to challenge consensus and seek differentiated, value-added views. His economics and finance interest came from understanding systems—political, economic, and market systems—rather than a stock-picking origin story. At Everest, the most important lesson was to make money rather than be right; incentives and execution mattered more than intellectual purity. LP work requires fewer but deeper decisions than direct investing, so the analyst must recalibrate from turnover-heavy thinking to long-horizon portfolio judgment. Marketing experience improved manager selection because it revealed how managers think, how to ask questions empathetically, and how to detect gaps beneath polished presentations. A concentrated portfolio needs a core set of trusted managers plus a deliberate path for new ideas; otherwise, the book stagnates and opportunity is missed. Managers should be judged on alignment with the evolving needs of the portfolio, not on recent performance alone. Market risks once associated with emerging markets—political uncertainty, social polarization, policy risk, and geopolitical risk—now apply broadly across geographies. The right first question is not whether a currency is good or bad, but 'depends on why,' because market outcomes are conditional and context-driven. Portfolio construction should be dynamic and opportunity-set driven, not a static checklist of target buckets or factor exposures. Technical analysis helped him think about changing regimes and avoid curve fitting, reinforcing the need to question inherited biases. Young allocators should model many investors, but ultimately make the framework their own to ensure coherence between strategy, mindset, and execution.

Data Points: Foundation assets: roughly $14 billion - Hewlett Foundation assets under management as described in the intro. Career length at Everest Capital: 15 years - LeBoy spent 15 years as a direct emerging markets investor before moving to Hewlett. Initial time at Everest before warning: 6 months - He was told another review might not happen unless performance improved. Time from near-firing to promotion: 12 months - He went from nearly fired to partner within about a year after the turnaround trade. Core family size: 5th of 6 kids - He grew up in a large family that fostered debate and strong opinions. Household composition: 2 parents, 1 grandmother, and a St. Bernard - Used to illustrate the lively, crowded household environment. Time horizon at LP expectation example: 10 years - He recalls being surprised that an LP wanted a manager in place for 10 years. Japan first-meeting impression: 3 words - He says he heard only about three words in the first Japan meeting before writing 'buy big, buy a lot' on his computer. Hewlett summit relationships: 432 allocator organizations - Mentioned in the podcast ad copy describing Capital Allocators' summit network. Hewlett summit manager relationships: 301 managers - Mentioned in the podcast ad copy describing the summit network. One-on-one contacts generated: over 125,000 - Capital Allocators' summit network statistic in the promo segment. Morgan Stanley investment scale: $1.9 trillion - Advertising copy for Morgan Stanley Investment Management. AlphaSense document library: over 500 million curated documents - Advertising copy describing AlphaSense's content base. Career transition timing: about a month - After calling Anna and interviewing, he moved to San Francisco about a month later. Review cadence: Monday morning meetings - The team’s recurring forum for manager debates and shared conviction building.

Pivotal Quotes: "you're trying to be right rather than make money, and our job is to make money." — Marco: Advice LeBoy received at Everest after a difficult six-month review. "depends on why" — Ana Marshall: Her response to whether a strong or weak currency is good for emerging markets; it shaped LeBoy’s view that the question matters more than the spreadsheet answer. "borrow freely and liberally from others, but in the end, make it your own." — Luis LeBoy: His closing advice to young allocators about building an authentic investment framework.

Implications: Allocators should abandon rigid market labels, focus on regime change and disruption risk, and build portfolios dynamically. Manager selection must emphasize alignment, not buzzwords or recent returns, and young investors should develop an original, coherent framework.