Pursuing multiple ways to win
Laura Hill changed the course of her career following one detour through a college job fair tent: Though she once thought she would spend “a few years” as a financial analyst then go to medical school, she abandoned the idea of med school for finance completely. After graduating from Indiana University in Bloomington armed with both a Business major and pre-med coursework, Hill followed the visit to the job fair tent to an analyst job at Ernst Young, before she moved on to Denali Capital, a CLO manager, both in the Chicago area. While the markets crashed during the Great Financial Crisis, Hill ascended at Denali as she earned her MBA at Northwestern University’s Kellogg School of Management, had the first of three children, and landed on the shortlist compiled by Advocate Health Care CIO Leslie Lenzo who hired her seven years ago.
Since Advocate Merged with Aurora Health Care in 2018, and the Chicago-based organization became the 12th largest nonprofit hospital system in the United States, Hill has continued her evolution in asset management. After spending the past seven years building out Advocate Aurora’s Alternatives Platform as well as developing and managing analyses for private equity, hedge fund, and private real assets investments, she now focuses her time on private markets, including funds, and co-investments, as well as on diversity – as Hill tells Hightree Advisors Principal and Senior Advisor Lisa Laird via Zoom.
LISA: Let’s talk about Advocate Aurora.
LAURA: I spend most of my time covering alternative assets for a pool of about $12 billion of capital that supports our organization’s healthcare mission. As with most healthcare systems, we have several other miscellaneous pockets of capital, including DB and DC plans. Often at hospital systems, the legacy investment management was housed in the treasury department, so there has been an element of cash management as well.
Within Advocate Aurora, we have an allocation that’s 50% alternatives (20% private equity, 20% hedge funds, and 10% real assets) and 50% in traditional investments. We’re leveraging an outside consultant and building out an in-house team, which is 10 people today. When Advocate Health Care merged with Aurora Health Care, we revisited governance structure and deployed $2 billion across a revised asset allocation in one day as we merged the portfolios – in addition to undertaking projects like harmonizing benefits plans across the various legacy pools.
LISA: What asset class are you most excited about at this point?
LAURA: I find the most exciting opportunities time and time again are in private real estate – not big core real estate funds, but real boots-on-the-ground, sharpshooter real estate where you get to harness the fact that any property’s highest and best use is constantly evolving. As the way we live or work or play changes, so does the way we use real estate.
Rather than any single asset class, I get excited about hands-on transformation.
LISA: Do you have an investment philosophy?
LAURA: My overall mentality is “Focus on downside protection and visualizing what can go wrong.” I think about asymmetrical return profiles, and I love optionality and multiple ways to win – not betting on single ways to hit home runs, but on businesses that will generate steady singles and doubles with some great upside optionality.
LISA: Do you think more paths have opened for women to win in more ways?
LAURA: Absolutely. There are more industry events for mentorship, and people are taking additive measures to look outside their recruiting patterns. Having someone in those roles helps you picture yourself in that seat. Growing up outside of the coasts in Muncie, Indiana, I didn’t know it was a feasible path for my background, which was more liberal artsy, and I didn’t know anybody in asset management or what that job looked like.During my senior year of college, I had a few financial analyst interviews, thinking I’d work a few years doing that, then go to med school, but I never thought finance was going to be my career. I was walking through campus, and Ernst Young's Transaction Services team had a recruiting tent; long story short, I got a job as part of the valuation team to do modeling and business valuations of companies big and small. Next, I went to a CLO manager, where I got to underwrite a wide range of companies, dig into term sheets, and learn the mechanics of M&A. During the Great Financial Crisis, it was a great opportunity to get a seat at the table for workouts and restructurings, and to see what worked and didn’t with various sponsors.
think that with mentors and representation, women will be encouraged to pursue new paths. I had a classmate, Natalie Nadler, at Kellogg who had an allocator role in Boeing’s pension fund, coming from a path more similar to mine. She convinced me I’d be good at it, and that gave me some encouragement to step out of my comfort zone, so when Advocate Aurora’s CIO, Leslie Lenzo, posted this current role, I applied. Leslie saw that while I didn’t have the precise path of an allocator, all the pieces were there. Simply seeing people like Natalie or Leslie thrive in their roles made it possible for me to visualize myself on this path.
LISA: Thank you for sharing that.
LAURA: Coming from an academic household, testing hypotheses was drilled into me by my parents. Even when I took a business law class, my dad (who was a business law professor) would point me toward the legal research and database service, Westlaw, versus giving me any tips. Being a generalist in every sense of the word benefits you, and understanding different languages, cultures, or disciplines always pays off.
LISA: I read an article where you talked about investigative journalism.
LAURA: This job is investigative journalism. If you do a site tour and you don’t know why something is the way it is, ask: You learn more than just about the site itself; you get a glimpse into team dynamic, technical or operational expertise, risk mitigation, and many other behaviors that are hard to get from a data room. It’s a skill set; you can’t train for it, so in hiring, it’s one of the hardest things to look for.
LISA: What can we do to make things more inclusive, especially at organizations that don’t have high turnover?
LAURA: Without room to hire new folks in the short term, you have to focus on the equity and inclusion part and plan for the future. Then, when there are opportunities to hire, cast a wide net and be thoughtful about making sure you’re building a diversified “portfolio” of talent: Be intentional about developing an inclusive culture that values differences and offers a chance for people with a wide range of backgrounds to bring things to the table.
I think those of us like me have historically tried to work like we didn’t have kids, and parent like we didn’t work. I bet a lot of us hesitated to pursue opportunities for fear of losing the supposed goodwill we’d built up that “allowed” us to have some tiny bits of flexibility around our week: We felt that we owed them something for every tidbit of flexibility we were granted, likely selling ourselves short in terms of our true value to the team.
Those of us who came up as one of the guys, or one of the only women in the team, got used to perpetuating the norms of what it is to be a good employee. Both of my early cultures came from more of an old-school banking environment where it was about being technically perfect, first there/last to leave, and not being away from your desk. While we were all nurtured in technical skills and worked to hone traits – not showing emotion, having thick skin, or maybe on the margin, being a harder personality – softer traits like patience or the ability to lift others up weren’t part of the performance evaluation.
I think that focusing on culture, valuing teamwork, and welcoming a wide range of backgrounds are good for business and inclusivity, capturing hard-working, curious employees across the spectrum, and retaining the good ones for the long term.
LISA: I think the healthcare environment naturally allows for the EQ (Emotional Quotient) that you’re talking about.
LAURA: Healthcare professionals likely had to interview with different functions and show a level of collaboration necessary for the heavy lifting of building out a team and risk systems: You need to balance so many stakeholders with varying degrees of understanding, like a chaplain who may sit on your investment committee, an HR executive, or a controller who may understand accounting and finance but doesn’t have a background in institutional investing and asset allocation.
LISA: What are you most proud of in your work?
LAURA: From not really knowing what the allocator role was, to sitting on panels where I could speak fluently about much of our portfolio and our investment philosophy: That’s a progression I’m really proud of, to cover so much ground and get thrown right into the fire – for example I learned enough about systematic investing that I can be a reference call for a few of our more quant managers to this day. I’m also proud of the diversity initiatives in our program, not just thinking with a traditional dollars-with-diverse-owned-managers approach, but also, “How do we increase the diverse talent in the industry so that 10 to 20 years ago, it looks different holistically?”
LISA: What brings you joy?
LAURA: Truly lots of things: I pepper in my Peloton and a good crime novel; I love my children and travel. On the work front, the high point is to identify under-the-radar managers and see their special edge and commit capital and use that power of the large pool of capital to back good operators that build good businesses.
LISA: How about motherhood?
LAURA:I think I could have progressed farther by now professionally if I had job-hopped a bit more in the middle, but I felt I was not able to make a career moves because I would be viewed as not being able to give 24/7 to my job. I think a lot of people my age thought the choices were either push and work until you’re successful and hope you can still have kids, or have kids young and scale back in the workforce for a bit because, well, do the math: Is it worth it to work for net-pay after childcare?
Until we figure out the childcare dilemma, and without the culture of firms shifting a bit to be inclusive of young caregivers (regardless of gender) who want to be home for dinner or do school drop off occasionally, it’s hard to envision this changing.
LISA: It reminds me about an article in The Atlantic, “Why Women Still Can’t Have It All.” It’s important to discuss childcare.
LAURA: For sure – and we need men not just to hire women but men to show that they also want to be part of parenting and household management. I think there’s a real tension between the decision to advance your career and the decision to have kids, so hopefully that will improve, and we can retain women in their careers. The more that a firm looks at it as a long term investment in talent, the more they can keep those employees who are rich in industry knowledge, despite a short period where they may have bookends on their physical “work day” in an office, given a desire to be present with their kids before bedtime.
This has been edited for length and clarity.