2025 Performance Review

200–300 basis points above the median endowment. What drove Crewcial’s 2025 OCIO results, and why the conditions that produced them are unlikely to reverse.

There is a species of pine whose cones remain sealed for years, sometimes decades. They don’t open in mild weather. They open in fire. The heat that looks, from the outside, like a threat is precisely the mechanism of activation. It was built so that only those conditions could release what it had been holding. We think about 2025 that way.

We typically don’t lead with numbers as a rule, but this one reflects something structural, and how it happened matters more than the figure itself.

The return wasn’t broad-market beta. It was concentrated in the areas where our positioning has been most differentiated and most questioned in recent years. Non-US developed and emerging-market equity were the primary engines: allocations most endowments have been reducing, not because fundamentals don’t support them, but because they require tolerating discomfort. Our underweight to US large-cap has been a drag for years, but in FY2025, it became an intentional advantage. The Mag-7 rotation, international value’s resurgence, the repricing of businesses marked down on AI disruption concerns: these are conditions we have described in our communications since 2023. These are not surprises, but the regime this portfolio was built for.

Interesting Times Continue

Leadership is rotating. Many of the structural features of today’s markets that once concerned us are now becoming meaningful advantages.

The LLM-driven disintermediation shock continues to expand. AI is compressing margins and challenging traditional intermediaries. Panic periods are rarely kind to our approach; we favor managers who lean into informational complexity and invest in misunderstood businesses, and that edge can disappear when fear drives correlations to one. But two things are clear: our managers are distinguishing between structural impairment and temporary repricing. And panics recede. When they do, markets reprice securities in a directionally rational way.

This matters. We are returning to a climate that fits our discipline well. The best investments we can make have asymmetric outcomes: intermediate downside of 20–30%, upside of 2–4x or more. Venture-style payoff profiles, in liquid markets, without venture-style capital risk. Today’s markets are offering an unusual number of these opportunities, and the structural instability driving them is unlikely to disappear.

Such opportunities only exist for a reason by definition: something looks broken or feels wrong. That is precisely why the pricing becomes attractive. They appear brilliant only in hindsight; in real time, they are unsettling.

Carvana was one recent example. The short-term downside was obvious. The intermediate-term downside was limited relative to the long-term opportunity; the upside was substantial. It worked. But the real question is not whether one example worked, but if this is repeatable. Our job is not to produce rare victories, but to compound capital at attractive rates over decades. Most institutional investors refuse to meaningfully pursue asymmetric situations because almost everyone prefers comfort to discomfort.

Software and payments are current examples. Many high-quality businesses have been repriced aggressively amid concerns about AI disruption and competitive pressure. Expectations are low and valuations are compressed. The embedded optionality is significant. Businesses that are already attractively priced do not remain deeply discounted indefinitely; we saw that dynamic clearly when Carvana traded near $4. The coiled spring effect is real, and the investors positioned in these businesses before the rerating hold a structural advantage over those who wait.

Emerging and frontier markets tell the same story. When Egypt and Nigeria allowed their currencies to free float in 2024, market reaction was immediate and negative. We spoke with managers, assessed the reforms, and reached a straightforward conclusion: devaluation paired with structural reform improved the long-term case. Most investors saw volatility and sold. We added. That is the difference.

What makes today compelling is that market structure itself is generating opportunity. Fewer fundamental investors, more performance anxiety, more preference for comfort. This is fertile ground for asymmetry, and because most investors won’t lean into that discomfort, the field stays less crowded. We are generating solid returns while increasing exposure to future upside. For the first time in a while, what is happening in markets aligns with our approach.

This works in our clients’ favor.

The 2025 result is the most recent visible expression of an approach that has compounded consistently. The table below reflects performance across the full available track record.