University endowments are trading the solitude of their leafy campuses for the hubbub of Wall Street.
Mount Holyoke, a liberal arts college set among the trees of Pioneer Valley in Massachusetts, is the latest school to announce plans to relocate its endowment to a financial center. It joins Cornell, Michigan State, Hamilton and several other schools that have moved to the New York area and Boston in recent years.
Mount Holyoke plans to follow a familiar playbook: create a new chief investment officer job and place the executive close to prominent managers for better access to their funds. The college, with an endowment of $780 million, plans to hire a CIO in the coming months and shift the office to New York or Boston.
“We think that will attract the most talented candidate,” said Louise Wasso, chair of the investment committee at the women’s college.
Endowments are sidling up to the titans of finance in hopes of boosting the returns that support school budgets.
“There have definitely been things we’ve been able to invest in because I was out here at the right place at the right time,’’ said Michigan State’s first CIO, Philip Zecher, who opened his office in 2016 in Connecticut, a hedge fund haven. “If I had to travel here, I probably wouldn’t have been at some of the events.’’
Performance Goal
The $2.9 billion endowment’s returns ranked among the lowest of the Big Ten universities in fiscal 2015 when Michigan State ran the fund from its farmbelt home in East Lansing with the help of consultants. In 2017 and 2018, with Zecher placing bets from Greenwich before moving to Stamford, the fund has been the best performer in the Big Ten, according to data compiled by Bloomberg.
Cornell, which left the gorges of Ithaca for an office near Times Square in 2017 as part of an overhaul of its $7.2 billion endowment, has seen a small performance bump. It rose to the sixth spot in the Ivy League rankings in fiscal 2018 from last place two years prior.
“The intent is to improve performance relative to Cornell’s Ivy peers,’’ said CIO Kenneth Miranda, who took the job in 2016 and cites reduced travel time in meeting managers in New York as a benefit of the move from Ithaca.