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When Peter Stein became managing director at Princeton University Investment Corporation, he realized he’d finally found the right line of work. “What I liked about it was that I could do absolutely anything, invest in anything anywhere in the world,” Stein told students in the Evening MBA and Weekend MBA Programs at Gleacher Center on November 19. “You get to make decisions that are purely investment-based.”
Stein was even more excited in July when he became CIO at University of Chicago, where he received a green light to pursue his investment strategies. “It was really interesting to move from Princeton to Chicago,” he said. “Most of the investors here have an academic and theoretical background. I was never intimidated by the Princeton guys, but Chicago has a tradition and mystique.”
One of Stein’s investment reports drew an observation from university trustee Sandy Grossman, AB ’73, AM ’74, PhD ’75, a former economics professor and member of the board’s investment committee. Grossman observed, “You don’t outperform unless you do something hard.” Among the biggest changes Stein made in the university’s portfolio were cutting U.S. equities almost in half and almost tripling real assets, he said. “You do the hard things,” Stein said. “You do the things that other people are afraid of, the things that are more complex.”
Stein, who started as a trader, said “gut and luck” made him successful there. “Being in the right place at the right time was very important,” he said. “Then I was hired by a hedge fund that did a lot of derivatives trading. In that case, I think I did well because I had a background in theoretical math. I couldn’t write you a model, but I could talk to the guys who wrote the models.”
—Phil Rockrohr