Institutional Investor
Risk Analytics
Portfolio Clarity
Institutional Investor
Risk Analytics
Portfolio Clarity
How Reed College Replaced Fragmented Data Workflows and Gained Deeper Portfolio Insight
Solovis Insider
Introduction
Founded in 1908, Reed College is a private liberal-arts institution located in Portland, Oregon. Known for its rigorous academic culture, the 1,400-strong student body benefits from a close-knit, collaborative community emphasizing intellectual curiosity and academic exploration. The endowment, roughly $1 billion in size, contributes about a third to the college's operating budget each year. The investment office is managed by a team of two.
Leadership Spotlight
Erik Bernhardt Chief Investment Officer Reed College
Erik Bernhardt joined Reed College in 2019 as its inaugural Chief Investment Officer. Together with his colleague Andrew Lonergan, he oversees management of the college's endowment. Prior to Reed, Bernhardt worked at Cambridge Associates, PAAMCO, and Artisan Partners.
The Challenge: Limited Data, Manual Analysis, and a Lean Team
Upon joining Reed, Bernhardt recognized an immediate challenge: the college's investment data, analytics, and workflows were insufficient for a modern endowment.
Key issues included:
- Limited data availability from the existing outsourced performance provider
- No ability to run factor analysis or risk diagnostics
- Heavy reliance on Excel
- No streamlined way to evaluate managers or assess and monitor portfolio structure
- Only two people managing an increasingly complex portfolio
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“One of my main goals was to institutionalize the investment office. We needed stronger systems and processes, and we simply didn't have the data to perform meaningful analysis. Solovis Risk Pro was exactly what we were missing." Erik Bernhardt, CIO | Reed College |
The Solution: Integrating Risk Pro for Multi-Layer Portfolio Analysis
When Bernhardt arrived at Reed, his first priorities were to establish an investment philosophy, develop an optimal portfolio structure for each asset class, and evaluate existing managers while identifying new ones where needed. A large component of this analysis was quantitative, and this is where Risk Pro made a significant difference.
Quantitative Assessment of Core and Satellite Managers
Bernhardt needed to validate Reed's core/satellite public equity structure. By uploading monthly returns into Risk Pro, the team could analyze:
- Tracking error
- Information ratios
- Factor exposures
- Contribution to risk
- Relative vs. absolute risk metrics
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"With performance data loaded into Risk Pro, we quickly identified what was working and what wasn't. Our core managers were performing well with appropriate tracking error and strong information ratios. However, some satellite managers were too diversified and, from a factor perspective, too similar to one another." Erik Bernhardt, CIO | Reed College |
Using contribution-to-risk metrics, Bernhardt implemented a more structured weighting approach. For example, Reed had two managers with similar information ratios but one with higher tracking error. That insight led the team to reduce the manager's weighting to better match their overall contribution to risk.
Tracking Factor Drifts Across the Hedge Fund Portfolio
Constructing a hedge fund portfolio is difficult due to constantly shifting exposures.
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""Risk Pro's ability to demonstrate factor loadings across time periods proved beneficial for understanding the big picture. What I found especially useful was seeing how those loadings changed over time and then easily unpacking the data to identify which managers were driving those changes." Erik Bernhardt, CIO | Reed College |
This capability enabled Reed to monitor factor trends, diagnose unexpected exposure shifts, and ensure the hedge fund portfolio aligned with the total portfolio philosophy.
Alpha with Fit: Fast Factor-Based Manager Evaluation
A key part of Reed's investment philosophy is identifying managers who operate in niche or capacity-constrained strategies and demonstrate alpha generation over time.
By providing real-time market perspectives and tools, AWMS empowers advisors to meet the evolving needs of their clients and access the full potential of private markets.
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"I'm always looking for managers who can generate alpha while fitting into the overall structure and philosophy of the total portfolio. Risk Pro allowed me to validate my hypotheses almost instantly. Analysis related to our US equity profile is a good example here. We had a long-standing 'core' manager that ran a 130/30 that appeared to run with low tracking error and strong alpha regardless of the market environment. Risk Pro let me test and confirm this belief in a very short period of time. On the other hand, the 'satellite' managers need to behave differently; that is, they should demonstrate and we should embrace meaningful tracking error in their long-term return pattern. Our analysis on Risk Pro revealed that some of our managers in the satellite bucket were actually functioning more like core managers, which was not ideal. Risk Pro is incredibly valuable for validating what you intuitively suspect and, importantly, helps provide concrete evidence for the Investment Committee." "Risk Pro has become an essential screening tool early in the process for determining whether adding a prospective manager makes sense going forward. I upload monthly returns into Risk Pro and examine the factors to see how they relate to my portfolio's positioning and existing managers in terms of exposures and correlations. Residual correlation is particularly important to me when evaluating managers for the hedge fund portfolio." BErik Bernhardt, CIO | Reed College |
Results: More Insight, Better Decisions, Greater Efficiency
With Risk Pro, Reed College's investment office achieved measurable improvements in analysis quality and operational efficiency.
Impact highlights:
- Centralized analytics replaced fragmented spreadsheets
- More accurate portfolio insights across asset classes
- Faster manager evaluations (minutes vs. hours)
- Reduced operational burden for a two-person team
- More robust Investment Committee discussions backed by data
- Improved ability to structure and underwrite the total portfolio
Results: More Insight, Better Decisions, Greater Efficiency
Reed plans to deepen its use of Risk Pro, especially as the platform continues expanding private markets capabilities.
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"Risk Pro has done an incredible job improving and adding new features to the platform. We hope to start leveraging more of what Risk Pro offers, particularly on the private markets side." "Unlike many of our peers, we are fortunate that we are not experiencing a liquidity problem, even with our private investments comprising roughly a third of our portfolio. The question now is how to take advantage of that strong liquidity profile. We're looking at areas of the market where there's been dislocation or where there is a dearth of capital due to large allocators pulling back a bit." Erik Bernhardt, CIO | Reed College |
Solovis Risk Pro
Endowment investment offices need factor-level visibility and manager evaluation tools that scale to lean teams without sacrificing analytical depth.
Solovis Risk Pro provides multi-asset factor analysis, contribution-to-risk metrics, and manager screening tools in a single platform. Teams can validate portfolio structure, monitor exposure shifts across time, and build Investment Committee-ready analysis faster.
*The Solovis subscriber featured on this page was not compensated for their statements. As a Solovis subscriber, their use of portfolio analytics or other Risk Pro features and their experience could differ from your organization's due to their particular use of Risk Pro, the version of Risk Pro used, or other factors. Not all subscribers will be equally satisfied. The person providing this testimonial was selected based on a variety of factors, some of which are subjective. This document is for informational purposes only. Not an offer to buy or sell securities.
