Investment Committee’s Wise Stewardship Helps the School’s Endowment Fund Grow
Thanks to great advice from a talented investment committee, SI’s endowment fund has grown substantially.
In fact, according to the Commonfund Benchmark study, of more than 700 educational institutions, only 10 had ranked in the top quartile in any three of the past four years. SI did even better, finishing in the top decile for five of the past six review periods.
Overall, SI’s investments have an annualized return of 11 percent over the past four years, ranking SI in the 14th percentile of the Total Fund Universe of the Independent Consultants Consortium — a universe of more than 8,000 funds made up of the accounts of 17 independent consulting firms across the U.S. as well as the custodial accounts of State Street Bank and Trust.
Adele Berwanger, a managing director of Cantebury Consulting and the consultant to SI’s investment committee, attributed the success to several factors, “including the strength of the committee as a whole and the leadership of Committee Chairman Tom Bertelsen.”
She also cited the committee’s relatively small size, with 10 members most of whom are “experienced investors who have expertise in institutional and individual investing. This committee consistently listens, discusses and is able to make smart decisions.”
For example, adds Berwanger, “the committee was early for a fund of its size in investing carefully in real estate, hedge funds and private capital. The investments in these areas, as well as the diversification of the total fund, has allowed for excellent returns.”
The endowment’s value stood at approximately $53 million last October. Each year, the school draws down 4.5 percent of the market value in order to ensure the fund’s growth to support scholarships in the future.
“Our objective is to provide an intergenerational sustainability so that we’re not favoring today’s students over tomorrow’s,” added Bertelsen.
He attributed the committee’s success to “the fact that we diversified more extensively than a comparably sized endowment and tried to emulate the success that we saw at Yale University. We carefully chose fund managers, including Dodge & Cox, who proved extremely successful as our value manager.”
Bertelsen also praised the members of the committee. “Each brings extensive investment experience in areas such as venture capital, private equity and real estate. And they understand that our primary role is to maintain a constant level of scholarship funding in real dollars, adjusted for inflation.”