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Stanford University Endowment Fund

Name: Stanford Management Company

Assets Under Management:  $17 Billion (Source: Stanford Management Company)

Stanford Pie

Portfolio Allocation Insights:

“Stanford has a responsibility as a global citizen to promote sustainability for our planet, and we work intensively to do so through our research, our educational programs and our campus operations,” said Stanford President John Hennessy (Source)

On May 6, 2014 Stanford became “the first major university to lend support to a nationwide campaign to purge endowments and pension funds of fossil fuel investments” (Source: NY Times)

Management Team:

Team Member Title

John Powers

President and Chief Executive Officer

Jeff Baird

Managing Director, Special Investments

Kristal Dehnad

Managing Director, Partner Relations and Programs 

Odile Disch-Bhadkamkar

Managing Director and Chief Financial Officer

Craig Blanchard

Managing Director of Real Estate

 

Contact Details:  For complete contact details for the Stanford Endowment Fund investment staff please access your copy of our Endowment Database.

 

Background on the Stanford Endowment Fund:

Stanford University uses its surplus of investing money to go into different forms of equity. The University also started to put a significant amount of money into natural resources and is slowly becoming more green to continue to change with the times and improve themselves. Stanford is a university that had a difficult time setting up funds to keep them going if their investments went bottom up. Until “April 2009, [when] Stanford University, reeling from endowment losses and in need of short-term liquidity, sold more than $1 billion of bonds and is now holding $800 million in low-yield money market funds. Stanford CFO Randy Livingston describes these actions by saying, “We’ve created a rainy day fund.”” (Source)

 

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Top Stanford Endowment Fund Headlines:

1) Stanford University will not make direct investments of endowment funds in publicly traded companies whose principal business is the mining of coal for use in energy generation, the Stanford Board of Trustees decided today. In taking the action, the trustees endorsed the recommendation of the university’s Advisory Panel on Investment Responsibility and Licensing (APIRL). This panel, which includes representatives of students, faculty, staff and alumni, conducted an extensive review over the last several months of the social and environmental implications of investment in fossil fuel companies. Stanford’s Statement on Investment Responsibility, originally adopted in 1971, states that the trustees’ primary obligation in investing endowment assets is to maximize the financial return of those assets to support the university. In addition, it states that when the trustees judge that “corporate policies or practices create substantial social injury,” they may include this factor in their investment decisions. (Source)

 

2) Few if any of the big U.S. pension or college endowment funds appear ready to follow in Stanford University’s footsteps and pull their money out of shares of coal miners or other fossil fuel producers.Officials from the pension systems for California’s public employees and schoolteachers and New York public employees, the three largest U.S. retirement funds, told Reuters they prefer to work with their portfolio companies to improve their behavior rather than divest them. Matthew Sweeney, a spokesperson for the New York State Comptroller’s office, which oversees the state’s $161 billion pension fund, said the state had “not divested from any fossil fuel companies. We do have an extensive history of engaging portfolio energy companies on climate change, emissions, safety and other issues to change and improve their business practices.” Officials at the $283.5 billion California Public Employees’ Retirement System, or Calpers, and the $183 billion California State Teachers’ Retirement System, or Calstrs, said their funds have a similar approach. (Source)

3) Judging from media accounts, U.S. nonprofits are facing unprecedented, if not catastrophic, financial distress because of endowment losses. Hiring is being frozen, facility maintenance is being deferred, programs are being dropped, performance seasons are being shortened, and construction projects are being cut back or even halted. As the president of Harvard University, Drew Gilpin Faust, put it when defending her decision to sharply reduce expenditures following a 30 percent drop in the value of the school’s endowment, “Tinkering around the edges will not be enough.” Harvard isn’t the only institution making dramatic cuts in response to a falling endowment. The J. Paul Getty Trust, which runs the J. Paul Getty Museum in Los Angeles, slashed 14 percent of its workforce and delayed exhibitions and acquisitions after its endowment fell from $6.4 billion to $4.2 billion. Yale University cut capital expenditures by $2 billion and staff salaries and benefits by 7.5 percent after its endowment fell from about $23 billion to about $16 billion. And the Shriners Hospitals for Children considered closing 6 of its 22 children’s hospitals after its endowment fell from $8.3 billion to $5.0 billion. The Shriners tabled that motion, but are considering billing insurance and Medicaid for treating children, a profound change from the free patient care that they have traditionally provided. (Source)

 

About Richard C. Wilson