Key Takeaways

  • Scott Malpass spent 32 years steering the University of Notre Dame endowment from $400 million to more than $20 billion, relying on long-tenured relationships with managers like Sequoia Capital.
  • Notre Dame deliberately avoided the aggressive, hard-bargaining tactics common at several Ivy League endowments, betting that goodwill yields better allocation access.
  • Operating as both an LP and later running concentrated equity at Grafton Street Partners revealed how compliance, capital formation, and LP relations drain GP time.
  • Experienced allocators shorten diligence cycles because pattern recognition replaces bureaucratic committee layers.

The Cost of Institutional Aggression

Institutions often believe squeezing terms out of general partners proves their fiduciary rigor. Malpass took the opposite path across three decades at Notre Dame. By avoiding aggressive positioning during fund formation, the endowment built enduring goodwill with managers who had no shortage of capital suitors.

“It wasn't really in our culture to have sharp elbows,” Malpass explained. “We always thought the best in people. We weren't naive, but we thought the best of people. We wanted to get to know them. We felt if we treated people well and were consistent in our relationship, they would treat us well.”

That stance created clear differentiation against institutional peers. “Some of the Ivy League schools had sharper elbows,” Malpass observed. “They looked out for themselves in some ways. We just had a broader sense of the world and humanity and our place in the world.”

When top-performing managers become oversubscribed, capital is a commodity. Access is not. General partners remember which limited partners extracted painful legal concessions or created friction during past market corrections. In tight capacity situations, goodwill functions as the tiebreaker.

The Dual Lens of LP and GP Operations

Allocators frequently underestimate the non-investment friction required to run an asset management firm. After decades deploying institutional capital, Malpass gained a direct view of the sponsor side through Grafton Street Partners.

“As an LP, you don't fully have a window into how much energy goes into the business part of the GP and on all the compliance, the back office, capital formation, communications with your LP,” Malpass noted. “There's a lot to that.”

LPs that create endless custom reporting requirements or drag out signature processes consume the very resource they are paying for: GP investment focus. Understanding the administrative weight on investment teams allows allocators to structure simpler, cleaner relationships that reduce friction on both sides.

Speed Through Pattern Recognition

Bureaucratic governance slows down capital deployment. Over 32 years, Notre Dame stripped away procedural friction by delegating direct authority to the investment office. That delegation let the team move rapidly when top opportunities surfaced.

"Much faster," Malpass said of their decision velocity. "As we got confidence and experience and delegation of authority and we didn't have a bureaucracy we had to be weighed down by, we could make very quick decisions."

The speed came from accumulated pattern recognition rather than rushed diligence. “I was at 32 years. I was a much better CIO at the end than I was at the beginning,” Malpass said. “I had good instincts, but you just get better at recognizing patterns quicker. These patterns of excellence in people.”

Why It Matters

When venture and private equity returns consolidate into a tiny cohort of elite managers, LP bargaining power in negotiations is an illusion. Squeezing small fee concessions or side-letter provisions often costs institutions their allocation in subsequent, capacity-constrained vehicles. High-performing GPs prioritize capital that arrives quickly, avoids bureaucratic friction, and respects the operational overhead of running a fund.