Macalester College, a private college in St. Paul, Minnesota, announced it will outsource its endowment’s investment management for the first time in its history.
The college this month announced that on September 1, it will shut down its internal investment office, which has been responsible for investing the endowment’s assets since 2002, and transfer management to Charlottesville, Virginia-based investment manager Investure LLC.
As of the end of March, Macalester College’s endowment had an asset value of approximately $877 million. According to the college’s website, 85% of the endowment’s assets were managed externally by about 48 different firms, while 12% of its portfolio—in Treasuries and cash—was managed in-house. Cambridge Associates was the endowment’s investment consultant.
“While this will be a new experience for Macalester, it is common for colleges and universities to work with private firms to manage their endowments,” said Macalester Board Chair Carrie Norbin Killoran in a statement. “This strategic shift in our investment approach has been made with one overarching goal in mind: to deliver consistent performance that grows the endowment’s assets over time.”
According to the announcement, the endowment’s board of trustees made the decision with the aim of delivering “risk-adjusted endowment performance with greater access to top-tier fund managers.” While Investure will oversee the endowment’s investment management, the board’s investment committee will continue to approve asset allocation and risk tolerance policies, as well as parameters for how the endowment’s resources are invested. The committee will also retain primary oversight authority, and Investure will report to the college’s chief financial officer for day-to-day operations.
“The firm has experience with and a sensitivity to divestment requests that occasionally arise on college campuses like ours,” said Killoran of Investure. “In short, Macalester gains access to more top-performing investment opportunities while retaining a level of flexibility necessary for our community.”
Investure manages approximately $18 billion of assets for other endowments and private foundations, with a focus on colleges and nonprofit organizations. Its college clients include Dickinson College, Haverford College, Franklin & Marshall College, the University of Denver and Middlebury College, among others. Its nonprofit clients include the Carnegie Endowment for International Peace, the National Academy of Sciences and the Woods Hole Oceanographic Institution.
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Tags: Carrie Norbin Killoran, Endowment, Investment Management, Investure, Macalester College, outsource
