This Couple Oversees Billions in Assets. We Caught Up With Them.

Amy Falls and Hartley Rogers aren’t your typical married couple. They shy away from the title of “power couple”—but they could both be considered powerhouses in their own right.

Rogers is executive co-chairman of Hamilton Lane , a global private markets asset manager. Falls is chief investment officer at Northwestern University. Between the two, they serve on nine boards, including at the Ford and MacArthur foundations.

At Northwestern, Falls manages an endowment of roughly $15 billion, of which she says private assets make up about half. At Hamilton Lane, Rogers oversees $140 billion in assets under management for individuals, pensions funds, and sovereign-wealth funds.

In short, Rogers’ company produces privates, and Falls invests in them—but that doesn’t mean they are always on the same page.

“We aren’t the same in how we approach financial questions,” Falls told Barron’s editor at large Andy Serwer in an interview alongside Rogers for the At Barron’s video series.

Where they do overlap is in their passion for higher education. They are both Harvard alumni and serve on boards at the university. Their foundation, the Amy Falls and Hartley Rogers Foundation, has donated millions of dollars to advance equity in education since they founded it in 2005.

Finance is also a shared passion.

“It is endlessly fascinating,” Rogers said.

“I did not wake up in fourth grade and say I want to be in the financial markets,” Falls said. “Over time, I found it is just a great place to think about the big questions in the world.”

Below is an edited version of the rest of their conversation with Serwer.

Barron’s: Do you two talk about work and bounce ideas off each other, or do you just leave it in the office?

Falls: We don’t leave it in the office at all.

Rogers: We talk about it all the time. That is probably why none of our kids want to go into finance.

Falls: But I think it has been fun. We aren’t the same in how we approach financial questions. We are very different kinds of thinkers.

How so?

Rogers: Amy is a very good top-down thinker. You can hear in the way she talks. I tend to be more rifle-shot: ‘Here is where I see the opportunity. Here is where I think we need to go. Here is what we should do.’ So I think I am a little more bottom-up.

Falls: I agree with that. And I think, over time, we have learned how to celebrate those differences as opposed to fighting about them. So that is good.

There are a number of common denominators in your careers. One is the world of privates. Amy, what role do privates play in the Northwestern endowment?

Falls: It is important to the endowment. We want to generate high returns in our equity portfolio in particular. We view that as a function of earnings growth over time. Markets go up and down, but if you invest in companies that are growing their earnings, you will generate returns.

We believe that privately-owned firms often are a better long-term play on earnings growth—both because investors have a bit more control and also because it is a better representation of mid-cap companies. It is hard to grow when you are ginormous. So we really like both the traditional private equity and venture capital spaces.

There are a lot of questions about liquidity, though, these days.

Falls: There are. One of the themes that I know we both think about is the role of retail investing and broadening access to private markets, which might make the margin go down or the opportunity set shrink a little bit. But I think the liquidity would be a very strong offsetting positive. And right now, liquidity hasn’t been so super.

Hartley, tell me about evergreen funds at Hamilton Lane. You guys have been at the forefront of that—producing a vehicle that high net worth and even ordinary investors can get into.

Rogers: Absolutely. It kind of ties to what Amy was talking about. In this environment, where you have had some challenges with distribution and liquidity going back to institutional investors, it has created a pool of opportunities in the secondary market and in the co-investment markets that you can package and use as core parts of these evergreen funds.

Evergreen funds have to have a shorter duration, since you are offering some limited liquidity in them to the investors. You need a duration of the portfolio to be shorter than your typical, very long-dated private-equity fund. So, having secondaries, some private credit, and some co-investments, which generally are fee-free from the underlying deal sponsor, can make for a really interesting mix in these evergreen funds.

Playing devil’s advocate though, a lot of people have suggested that the institutional space is saturated, and that is why you guys are going to the retail investor.

Rogers: I think the retail investors are seeing some of the best deals right now because the institutional investors—not all of them, of course—are a little bit frozen because of the allocations they made in 2020 and 2021. They haven’t had distributions back, and so they aren’t really able to take advantage of the opportunities to invest with some of these midmarket managers in the way that these evergreen funds can.

Amy, have you reduced your portfolio’s exposure to privates yet?

Falls: We are edging off. We haven’t reduced it dramatically, but we want to hold here or possibly edge down another percent or two.

What about the public markets right now? There is a lot of talk about an AI bubble.

Falls: Public markets do seem a little frothy.

I don’t know. I mean, we might have to see a broadening out of strong markets to really allow for exits. But I also think people don’t want to be public.

The problem with companies staying private is people don’t participate in the democracy and in the capital markets in the same way. And I think long-term that isn’t good for society. Overall it is a good idea to have everybody have a piece of the pie.

What is your macroeconomic outlook?

Falls: It is a tough macroeconomic environment forecast right now. On the one hand, the market is giving you a positive signal. Some of the macro variables are stable—inflation seems to be tame, interest rates are likely on a downward path—although I wouldn’t subscribe to an aggressively downward path. But the long-end of the market is a little less clear.

There is uncertainty around AI, and it is really hard to handicap what that means for long-term employment. I am concerned about some indications of softening in the labor market, which ultimately could feed through into demand more generally. So I am on the cautious side.

Hartley, I want to ask about Hamilton Lane. What is the firm’s approach, and how do you compete with some of the bigger companies, like KKR, Blackstone, and Apollo?

Rogers: We are all kind of frenemies. We all invest in a lot of the same things and check references with each other and share insights. But they really focus at the big end of the market, and we are very much a conduit to the middle part of the private equity market. If you look back over the years, middle-market deals tend to have a wider range of outcomes than big deals.

So, if you really want to access alpha and the asset class, you want to get into this part of that middle-market area. Because that is risky, you need someone that can help you figure that out. And that is what we do.

Amy, what about your investment style? What have you learned?

Falls: Size matters. You have to know where your edge is, and you are a different edge at $2 billion dollars [in AUM] than at $15 billion. The other thing that is critical—and very much changing now—is, what is your real liability that you are financing? So it used to be that all universities were kind of the same, more or less.

Size was the differentiating factor. Now, some people have more pressure on their operating model because of challenges with funding. The sector is being split apart in certain ways, which I think is an opportunity.

The two of you have a foundation that is focused on education and equity. What was the catalyst for choosing those as your pillars?

Falls: We are both pretty patriotic. My mother was in a first-generation immigrant family and, for her, education was critical. I think that is the American story. People need to be informed and they need to be able to access opportunity in order for us to make good on the promises that we are so proud of, in my opinion, in this country. I think we can still do a better job of making sure that every child has the best possible education.

Hartley, your father was a famous mathematician, as far as famous mathematicians go. What was the best advice he, or another mentor, gave you?

Rogers: I can think of a couple of mentors—my father was certainly one of them. And there was another one. When I was heading to Wall Street, they both said, ‘Make sure you find something you like to do. If you are just doing this because you want to make money and you succeed, that is great. And if you don’t succeed, then you won’t have done something that you really loved.’

I really followed that advice. It happens that I do love what I do. I love watching private equity as it has grown and changed over the decades.

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