Leader Analysis

CEO & CIO, Stanford Management Company

Robert Wallace, former professional ballet dancer turned investment leader, joined Stanford Management Company in 2015 and now serves as its CEO and CIO. Leading one of the largest university endowments in the U.S.—managing a diversified portfolio valued at approximately $36.5 billion (as of late 2023)—Wallace brings a rare blend of discipline, creativity, and rigor to stewarding Stanford’s long-term academic mission. 

Core Principle: Strategy, Execution & Governance

“If you form the right strategy, have the ability to execute, and good governance that protects you from outside interference, you can get attractive long-term results.” 

How to Apply:

• Define a clear long-term investment strategy aligned with institutional objectives.
• Execute consistently—including frequent rebalancing in volatile markets.
• Maintain strong governance to shield decision-making from external pressures.

Daily Rebalancing Discipline

Every morning… receive a flash estimate of the value of the portfolio… we will sell what has gone up and buy what has gone down to bring assets back to target. Rebalancing can happen daily in times of volatility.” 

How to Apply:

• Embrace discipline through frequent portfolio monitoring.
• Use rebalancing to align with target risk-return and liquidity profiles.
• Act decisively during volatility to maintain portfolio health.

Selective, Judgment-Based Partnering

“We select managers according to their grasp of the difference between investment and speculation… managers must be able to apply superior investment judgment to data… When we make a mistake about a partner, it’s mostly because we get their investment judgment wrong.” 

How to Apply:

• Prioritize managers with clear, repeatable processes and disciplined judgment.
• Regularly assess and calibrate partner performance.
• Be ready to reallocate or withdraw capital when manager performance falls short.

Talent & Team Culture

“We try to grow our own talent; hire out of Stanford and train our own.” 

How to Apply:

• Nurture a culture of intellectual curiosity, accountability, and collaboration.
• Build and promote internal talent pipelines connected to Stanford’s academic community.
• Design an open, flat team structure that encourages idea exchange and engagement.

Preserving Long-Term Endowment Value

“Because the endowment exists to support programs in perpetuity… we have to be careful to maintain the ‘purchasing power’ of the endowment… Typically, we draw down… roughly 5.5 percent… To maintain purchasing power… we have to earn back that 5.5 percent plus higher education inflation… we need to generate roughly 9 percent annual investment returns over long periods of time.” 

How to Apply:

• Design payout policies that balance current needs with long-term sustainability.
• Set return targets that factor in both spending and inflation pressures.
• Monitor the real value of the fund to ensure future generations are served.

Ethics & Stewardship

“Part of any economic analysis, Stanford Management Company closely considers ethical and social factors… not only is it the right thing to do, but as a long-term investor, Stanford must be concerned with ethical issues… We strive to work with external partners that share those same sensibilities.” 

How to Apply:

• Incorporate ESG and ethical considerations into investment evaluation.
• Partner with organizations that uphold aligned values and long-term vision.
• Avoid letting ideological biases override fiduciary responsibility to beneficiaries.

Conclusion

Robert Wallace’s leadership at Stanford Management Company is grounded in the architecture of long-term stewardship. By coupling a disciplined strategy with daily execution, cultivating domestic talent, and adhering to both ethical and financial rigor, Wallace ensures that Stanford’s endowment continues to power academic excellence for generations.