Investment Pooling Starting

Posted on 14/01/06 by admin

From Guardian Online

Oxbridge sharpens investments to match ivy league

Donald MacLeod
Wednesday January 11, 2006

Competition between Oxford and Cambridge is moving from the boat race into the stock market with the huge assets of their colleges at stake.

Cambridge today announced the formation of an investment board to advise on how to handle its endowment and other investment assets, which currently total more than �1bn.

Meanwhile the creation of a �100m fund by a group of Oxford colleges - which aims to attract investment from Cambridge colleges, as well - was revealed by the Financial Times.

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Both ancient universities are struggling to maximise their income and endowments to match the global competition from wealthy American private institutions such as Harvard and Stanford.

Significantly, Cambridge has brought in David Swensen, chief investment officer at Yale for 20 years, where he achieved remarkably successful returns, to advise the new board. It has also launched a �1bn fundraising campaign.

While the assets of Oxford and Cambridge are far greater than those of other British universities, their wealth is divided between their central administrations and scores of individual colleges. Both are moving towards pooling their investments to get better returns - and to convince benefactors that any money they give will be well managed.

Professor Alison Richard, vice-chancellor of Cambridge (and former provost of Yale), said: 'Building [up] the university's endowment and providing more income to support core activities are crucial elements in our overall strategy to strengthen and reconfigure the university's finances. Cambridge's benefactors must be confident that gifts to the endowment will be managed according to global best practice.'

One of the board's first jobs will be to appoint a chief investment officer for Cambridge - which will be closely watched to see whether �500,000 City salaries have arrived in academe.

At Oxford, a group of colleges led by Christ Church and St Catherine's is setting up a fund called Oxford Investment Management, to be launched in March. The colleges hope to pool their endowment funds for a range of investments, including venture capital, and hope the fund will attract investment from Cambridge colleges as well.

Oxford's vice-chancellor, John Hood, has also commissioned a report from Sir Alan Budd, the former Treasury economist who is now provost of Queen's College Oxford, on how the university manages its investments.

Pooling investments should have its benefits but the colleges guard their autonomy jealously and they tend to command greater loyalty - and donations - from alumni than the central university.

http://business.guardian.co.uk/story/0,16781,1684081,00.html