I guessed AI. Frank Mihail runs about $9 billion for North Dakota’s trust lands with three people, operations included, and when I asked him how that math works I floated the obvious 2026 answer. Is it AI too? What’s going on?
He waved it off. “I wish we were like more on the front lines of AI than we are.” Then he told me what he actually did. One of the first things he changed after joining in early 2023 was moving the public stocks and bonds out of internally custodied separate accounts into external commingled funds. Keeping them in house buys you maybe a day of liquidity. It also means that every month, before you close the books, somebody reconciles a thousand bonds. His version: “I can’t spend my time doing that.”
That one move is the whole conversation. The efficiency is not a tool he bought. It is a list of things he decided not to own operationally.
What sharpened for me is that an allocator’s headcount screens managers before their strategy ever gets read. Everyone in this business knows that and then pitches like it isn’t true.
The number Frank keeps is 40 line items. His entire portfolio fits on one page and he can recite it, as he put it, “like the back of my hand.” His old shop in New Mexico had ten people with dedicated operations staff and a 200 line item book. He has three generalists. So the minimum check is now around $50 million, and that minimum is what wrote his venture strategy for him. He inherited no venture at all. He wanted it. The question became how to write a $50 million check to one manager and still get a diversified portfolio behind it, which is why the larger platforms made sense as a starting point.
That ordering matters if you are raising. He did not start with the big funds because he believes big funds win. He started with them because the line item was the constraint and they solved it.
Then he did the thing I did not see coming. To get seed exposure he hired a seed fund of funds, wrote them $50 million, and let them write $5 million checks on his behalf to smaller seed managers. The small check exists in that portfolio. He is just not the one signing it. GPs read a pass from a plan like his as a conviction problem. Some of the time it is an accounting problem, and the live question is not whether he will back you. It is who writes the five million for him.
The second thing I took is that his balance sheet sets his risk appetite. The trusts collect revenue from state-owned land, mostly oil royalties and taxes, and Frank called that a natural hedge for the portfolio. He walked us through 2022. Stocks down 20, bonds down 10, the portfolio down 8. Net asset value down two and a half percent, because the royalty side had its best revenue year on the back of the same inflation that was wrecking the marks. No pension liabilities and a perpetual horizon, so the ability to take risk is real and he is spending it slowly. Last summer’s asset allocation review moved a little from credit to equity. It is the difference between a club living on gate receipts and one living on a league TV deal. One has to win this season to make payroll. The other can sit through a bad year and keep drafting.
Where I am still unsettled. Frank needs a track record. He said emerging managers are tougher for them, and the one open door he named is a firm they already work with launching a new product. I pushed early on the thing I actually believe about this asset class, that venture has an inverse relationship between dollars deployed and time spent learning it, and his answer came back structural rather than philosophical. He solved it with an aggregator. I do not know yet whether that aggregator is a bridge for new managers or a wall with a nice door in it. And when I asked what strategies he wishes he saw more of, venture never came up. About 75% of his inbound right now is private credit, where he is overweight and trimming, and the thing he is genuinely curious about is sports.
We have had a lot of guests on the show describe inheriting a blank slate. Frank is the first one who made me look at the size of the slate. Everyone else told me what they wanted to buy. He told me how many things he can hold.
Listen here: https://swimmingwithallocators.com/podcast/the-9b-portfolio-that-fits-on-one-page/
With gratitude,
earn