The $2 trillion view: NEPC's Tim McCusker on long-horizon allocation

Key points

Key takeaways from How I Invest with David Weisburd interview with NEPC President Tim McCusker (October 2026):

Scale of the book. NEPC advises on approximately $2 trillion in assets across more than 400 clients, spanning endowments, pension funds and healthcare organisations.

The peer trap. McCusker says the most sophisticated institutional investors still default to benchmarking peers, which introduces short-term thinking; the real edge of such a long-dated pool is investing for decades.

Governance beats managers. Value, he argues, comes less from picking the best managers and more from governance and incentives — annual compensation cycles are too short to evaluate investment performance fairly.

CIO longevity. Long-tenured CIOs tend to perform because they build teams and enjoy stable investment committees and leadership; turnover in non-investment roles often cascades into the investment team.

What separates top LPs. The best allocators stay fully invested, diversify widely and add to managers during downturns when the original thesis holds and the cycle is about to turn.

Deploying in downturns. Institutions such as Yale and Michigan deploy when others retreat because of preparatory work and, crucially, investment-committee support — a CEO is only as good as the board allows them to be.

Newer funds. Over half of the private-market funds NEPC underwrote over the past decade were funds one through four, reflecting a focus on finding newer managers early.

Construction differs by mandate. Endowments build bottom-up manager rosters and run higher private-market allocations (sometimes approaching 40–50%), while pensions take a top-down asset-liability view with fewer private commitments.

Read more: How I Invest with David Weisburd