Stanford Negotiates
The university told Congress that paying higher fees is necessary to get access to skilled managers in a competitive market. “Though this situation means that the university is primarily a ‘price-taker’ in terms of the fees it pays,” the school said, it “routinely negotiates favorable terms.”
Grinnell College in Iowa said its performance fees can range from 10 to 30 percent of net profit.
Texas Christian University and Trinity University were the only ones to give details on performance fees.
Trinity, which manages $742.5 million, also distinguished itself as one of two schools to reveal the names of the funds in which it invests. They include private-equity fund Energy Spectrum VII and venture capital fund Woodside Fund IV. Trinity said it paid $2.6 million in management fees for fiscal 2015. The San Antonio, Texas-based school hasn’t paid performance bonuses since its private equity investments are new, said Sharon Jones Schweitzer, a school spokeswoman.
TCU’s $1.5 billion endowment paid about $13.6 million in management costs and $3.6 million in performance fees to asset managers for the year ended May 2015, when the endowment returned 9.6 percent, according to its response. The school disclosed all fees to give an accurate picture of endowment costs, said James Hille, chief investment officer at TCU.
“If you’re paying performance fees, and even high performance fees, that’s ultimately a good thing because you are generating high rates of return,’’ Hille said. “We made the assumption that they would be coming back and asking for that later if we didn’t provide it.’’