Tim McCusker on Why Top Allocators Add to Underperforming Managers
Tim McCusker explains how institutional governance, committee alignment, and pre-downturn planning dictate contrarian LP deployment during market bottoms.
$2 Trillion Investor on AI Portfolio Risk, Finding Top Funds, and Preparing for a Downturn
With David Weisburd, Tim McCusker · Sunday, October 25, 2026
Tim McCusker, President of institutional investment consulting firm NEPC, joins David Weisburd to discuss managing approximately $2 trillion in advisory assets. McCusker analyzes institutional herd behavior, why investment committee governance dictates contrarian deployment during downturns, how pensions and endowments approach asset allocation, best practices for co-investments, and how macro risks around AI concentration and the federal deficit impact long-term portfolios.
Key takeaways
- NEPC President Tim McCusker, overseeing roughly $2 trillion in advisory assets, argues that contrarian deployment during market drawdowns depends on committee alignment rather than portfolio analysis. Read more →
- Re-underwriting a general partner's direct deal burns institutional diligence resources without improving returns. Read more →
- Tim McCusker tracks roughly $2 trillion in advisory assets at NEPC, yet finds that most institutional portfolios still cluster around median peer allocations instead of pure liability needs. Read more →
- NEPC advises on roughly $2 trillion in assets, observing stark structural divergence between university endowments and public pension plans. Read more →
- Institutional portable alpha blew up in 2008 because managers carried an unhedged 0.2 to 0.3 equity beta inside supposedly market-neutral alpha pools, triggering cash drains during margin calls. Read more →
- Over half of the private markets funds underwritten by NEPC over the past decade were Funds 1 through 4, driven by institutional appetite for early-vintage outperformance. Read more →
6 articles from this episode
Tim McCusker: How LPs Blow Co-Investments
Tim McCusker of NEPC explains why institutional co-investors fail when they re-underwrite deals, and how CalSTRS generated alpha from fees.
Tim McCusker: Why $2T in Advisory Assets Still Chases the Herd
Tim McCusker of NEPC explains why institutional allocators follow peer herds, driven by annual pay cycles and short CIO tenures.
Endowments Pick Managers While Pensions Model Liabilities
NEPC's Tim McCusker on why $100B pensions cannot touch venture funds and how endowments run 50% private allocations.
Tim McCusker on Portable Alpha and Pod Shop Capital Flows
NEPC President Tim McCusker explains hidden beta in portable alpha, cash hurdle shifts, and why institutional allocators still pay pod shop fees.
NEPC Underwrites Emerging Managers Through a Discovery Track
Tim McCusker explains how NEPC uses a discovery platform to underwrite emerging private equity managers despite operational deficits.
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