Capitalize on steep pullbacks in Enterprise Software & SaaS incumbents by dollar-cost averaging into 10% to 20% drawdown tranches, as established platforms remain the primary distribution channel for new AI tools.

Take profits and exit long Crude Oil positions whenever geopolitical supply shocks push prices above the key $100 per barrel threshold.

Target AI Data Center Infrastructure assets that already have secured municipal permits and grid power access to capture rising scarcity premiums over the next 5 to 7 years.

Increase long-term allocations to Biotechnology over a 10-year horizon to benefit from high-impact curative treatments that operate independently of broader economic cycles.

Hedge exposure to broad European Equities to protect against regional macroeconomic risks, while avoiding Private Credit due to unfavorable downside risk compared to standard equity strategies.

Anthropic (Private)

• Baylor University holds approximately 2.5% of its $2.6B–$2.7B endowment in Anthropic.
  • The position was built via underlying venture managers rather than direct investments.
  • The endowment holds zero exposure to OpenAI or SpaceX, making Anthropic its primary concentrated bet on foundation models.

Takeaways

• Anthropic represents a core institutional holding for AI foundation layer exposure among top allocators seeking direct, high-conviction exposure to generative AI leaders.

Enterprise Software & SaaS

• Software valuations experienced steep sell-offs of 50% to 60% in early 2026 due to market fears that generative AI and "vibe coding" would render traditional SaaS obsolete.
• Established software platforms possess entrenched customer relationships and high switching costs; enterprise customers are unwilling to risk operational reliability on unproven AI code.
• Traditional software providers are positioned to serve as the primary delivery mechanism and interface for specialized AI features rather than being displaced by them.
• Baylor capitalized on this market overreaction by deploying capital methodically in 10% market drawdown tranches.

Takeaways

• Look for value opportunities in established, mission-critical SaaS platforms that were sold off aggressively; existing enterprise trust makes incumbents the most practical distribution channel for AI tools.
• Implement a disciplined dollar-cost-averaging approach into market corrections (e.g., deploying additional capital at pre-set 10% to 20% drops) rather than trying to call an exact market bottom.

AI Data Center Infrastructure & Permitted Land

• The critical bottleneck in AI infrastructure has evolved from access to land, to access to power, and now to permitted, powered land.
• Growing pushback from local populations over increased power costs and water consumption (especially in arid regions like Texas and Arizona) has made regulatory and municipal permitting the primary constraint.
• The UK faces even more severe permitting restrictions than the US, significantly inflating the value of existing approved sites.
• Fully permitted data center sites with secured grid power access have seen their valuations increase by 50% over a six-month period.

Takeaways

• Pure-play infrastructure investments with existing municipal permits and secured grid interconnects command significant scarcity premiums over unpermitted development projects.
• Infrastructure bottlenecks, power delivery limits, and water consumption challenges present key execution risks for hyperscalers over the next 5 to 7 years.

Biotechnology

• The biotechnology sector is positioned for an acceleration in growth and impact over the next 10 years.
• The investment thesis is driven by scientific advances transitioning from merely managing chronic symptoms to developing outright curative treatments for complex diseases.
• The sector offers fundamental diversification due to its low correlation with broader macroeconomic and equity market cycles.

Takeaways

• Consider increasing long-term portfolio allocation to biotechnology as therapeutic advancements and curative medicines decouple sector performance from general equity market movements.

Energy & Crude Oil

• Baylor fully exited its long energy positioning after crude oil crossed above $100 per barrel.
• The decision was triggered by geopolitical tension and escalation involving the US, Iran, and the Strait of Hormuz, using the price spike as a liquidity event to de-risk.

Takeaways

• Take profits on commodity and energy holdings when geopolitical supply shocks drive prices above key psychological thresholds (such as $100/barrel crude).

Private Credit

• Private credit is viewed as an overhyped asset class offering an unfavorable risk-reward dynamic.
• The structure of private loans exposes investors to equity-like downside risk during borrower defaults without granting equity-like upside participation in successful outcomes.

Takeaways

• Exercise caution when allocating to private credit; equity strategies often offer a superior risk-adjusted return profile given the asymmetric downside inherent in subordinate debt structures.

Growth Equity vs. Venture Capital

• Growth equity strategies frequently provide superior capital compounding compared to early-stage venture capital due to the velocity of capital.
  • Redeploying capital across shorter, 6-year funds achieving 3x returns compounds to 27x over an 18-year period, outperforming a single long-duration venture fund delivering 15x over the same timeframe.
• Growth-stage companies carry significantly fewer total write-offs ("fewer zeros") than early-stage startups, helping Baylor's growth portfolio generate approximately 30% annualized returns.

Takeaways

• Evaluate private asset opportunities based on total internal rate of return and capital velocity (time-to-cashback) rather than just gross return multiples over long, illiquid time horizons.

European Equities

• Macro sentiment on Europe remains broadly negative due to elevated geopolitical risks involving Russia, lagging domestic AI and technology innovation, and burdensome regulatory environments.
• Baylor maintains short macro hedges against European stock indices while selectively holding niche European long/short equity managers.

Takeaways

• Maintain an underweight or hedged stance on broad European indices, focusing European exposure strictly on long/short strategies capable of exploiting high corporate dispersion.