Jim BaileyJim Bailey, Co-Founder, Cambridge AssociatesJim Bailey has had a busy year. In additional to his managerial responsibilities at Cambridge Associates, he has been assisting the Memorial Sloan Kettering Cancer Center to pursue a broader selection of global strategies across a range of asset classes, and he has helped Pomona College increase its exposures to oil and gas, hedge funds, private equity and international stocks.
Jim Bailey
Bailey, who is the primary or co-primary consultant to nine nonprofits, has also been trying to eradicate credit risk in client portfolios, such as cutting exposure to high-yield bonds and levered hedge funds, and recommending a flight to quality. So it’s no surprise, therefore, that Cambridge clients avoided hedge fund blowups over the summer and stayed away from the highly-levered short-term bond funds that recently experienced severe losses. Bailey is also negative on the U.S. dollar and is advising clients to hold at least half of their equity exposure in international stocks.
In early 2005, in a huge vote of confidence, Bailey was appointed as the John S. and James L. Knight Foundation’s outsourced cio; he had been its lead consultant since 1986. W. Gerald Austen, chairman of the foundation’s board of trustees, said Bailey and his team have spent a lot of time ensuring the foundation gets access to top-tier private equity funds. Since becoming its cio, Bailey has increased the foundation’s private equity and emerging market equity exposure and decreased its commitments to hedge funds.
Carlene Miller, v.p. and treasurer at Pomona, said the thoroughness of Cambridge’s due diligence gave the school sufficient confidence to hike its target hedge fund exposure to 22% in May from 18% as a risk reduction measure. Bailey, who has worked with Pomona since 1980, has steered the endowment into high-quality hedge funds with little leverage. Miller described Bailey as straight-forward, easy to interact with, knowledgeable and extremely responsive.
Michael Gutnick, cfo at Sloan Kettering, concurred. Bailey has encyclopedic knowledge of investment managers; mention a manager’s name to him, Gutnick said, and Bailey will tell you whether the person went to college and the name of his wife. Gutnick said Bailey has lead the hospital’s diversification process. “He’s brought us to a number of new and exciting alternative investment [managers].”