Stanford Endowment Leaders Built an Outsourced-CIO. Now, They’re Working on Succession.

Makena Capital has a new and “very Millennial-esque” structure, as one person put it.

Makena Capital has its headquarters in Menlo Park. (Michael Short/Bloomberg)

Makena Capital has its headquarters in Menlo Park.

(Michael Short/Bloomberg)

Makena Capital Management — the outsourced-chief investment officer firm spun out from Stanford’s endowment — has shaken up its structure to set up the next generation of leaders for day-to-day management.

Last spring, Makena replaced its four-person management committee and CEO structure with a “broader, flatter” 10-person committee and managing partner arrangement, three knowledgeable sources told Institutional Investor.

Co-founder Mike McCaffery returned to day-to-day operations as the sole managing partner, while retaining his seats on the investment and management committees. McCaffery — the Stanford Management Company’s former president and CEO — formed Makena in 2005 with ex-Stanford colleagues, among others.

David Burke, also an SMC alum, relinquished the CEO title in June after more than five years in the role. Makena has no plans to directly replace him or name a successor for managing partner McCaffery, multiple knowledgeable sources said.

Burke has stayed on as a managing director, with seats on Makena’s board and leadership panels. But like McCaffery, he now wields only one vote out of 10 on the management committee.


The next generation of firm leaders wanted Makena’s structure to be flatter, and existing partners of all vintages agreed, two sources said.

The outcome is “very millennial-esque,” as one person close to firm put it. Makena made the right move, the source believes — but they predicted that the rising cohort would discover challenges of a more democratic rule.

The Silicon Valley-based OCIO firm manages about $19 billion in assets for endowments, foundations, family offices, and other institutions looking to draw on Makena’s deep bench of former endowment luminaries.

[II Deep Dive: The Outsourced-CIO Earthquake]

The investment division hasn’t changed, someone close to the firm said. Makena tends to “innovate in the business, but the investment side is meant to be boring, stable, and long-term,” per the source. CIO Larry Kochard — the University of Virginia’s former endowment fund chief — remains in charge of the growing funds.

“For typical, less than $1 billion, not-for-profits or family offices, it’s difficult to invest on your own,” Kochard told II for a previous story. “You could keep it really simple and could go passive, but the returns from doing that have been very muted over a long period and probably will continue to be.”

Makena pulled in more than $1 billion in new capital last year, largely from existing clients, a source said.