Cambridge Associates, which helps nearly 200 institutional and private investors build portfolios and manages $78 billion of assets on their behalf, has named a new head of its investment strategy office.
Kristen Tongberg, a partner and a chief investment officer in the endowments and foundations practice who has been at Cambridge for 20 years, is replacing Noel O’Neill as leader of the investment strategy office. She will also join the company’s executive leadership team, Tongberg said in an interview with Institutional Investor.
O’Neill, another veteran investor who was at Cambridge for nearly 30 years, is leaving the company to work for a Cambridge client, a family office. O’Neill planned to begin scaling back his responsibilities at Cambridge this year and when the family office learned that news, it asked if he would join it. The consultant declined to name the office.
Those types of opportunities often come up for portfolio managers at outsourced chief investment offices and Tongberg said that Cambridge always supports employees who pursue them. Noel “is one of the most admired and respected individuals at our firm and someone that we’ve all gone to for advice and support. He’s just an incredibly thoughtful person and investor,” she said.
At Cambridge, the investment strategy office is a critical “center point” of the firm and the leader is responsible for making sure that all the investment teams have what they need to build bespoke portfolios for pensions, endowments, family offices and other clients. Like O’Neill did, Tongberg said she will continue spending about half her time managing portfolios for clients and half supporting the other OCIOs and the Cambridge investment platform.
“It’s important, I think, in this role that I still am doing the groundwork of managing client portfolios. That gives me the firsthand knowledge of what we need from the rest of the firm to drive performance. But in addition, I can source best practices and ideas from all the other team leads and hear more about new ways we can do things as well, integrating data and things of that sort to make us even better,” Tongberg said.
For decades, Cambridge worked with institutional and private investors as a consultant. But over the past 20 years, as portfolios became larger and more complex, an increasing number of clients have asked it to manage investments on their behalf, not just make recommendations. Today, Cambridge is primarily an OCIO business. The same evolution has happened at other similar companies. Over the past five years, Cambridge has nearly doubled its pension OCIO assets and it continues to pursue acquisition opportunities to bolster its investment capabilities and expertise and expand its client base. But the number of institutional investors is not expanding like the number of family offices. The number of private clients Cambridge provides OCIO services to globally is up 56 percent over the past five years.
Like institutional investors, family offices have different needs and their portfolios have become more complex, requiring tailored portfolios. “Some families are very risk averse and some are really looking to drive returns and growth in their assets over time,” Tongberg said.
Working with Cambridge also means family offices can get better access to investment opportunities that they otherwise might not be able to. Customized portfolios mean that the family offices also establish their own individual relationships with managers that are transportable. “Once the client has access, they want to own that for as long as possible. Some of our clients might transition over time to build their own in-house investment office. They don’t want to start from scratch. They want to know they have access to these preeminent firms already,” Tongberg said.
