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Williams College Endowment Fund

Name: Williams College Investment Office

Assets Under Management:  $2.3 Billion (Source: Williams College on 6/30/2014)

Annual Report:  Williams College Investment Report 2014

Portfolio Insights: “The Williams College Investment Pool produced a 17.5% return for the fiscal year ended June 30, 2014. This represents the fifth consecutive year of positive performance with four of the five years producing double-digit returns. The Williams portfolio outperformed our internal Policy Portfolio benchmark, as well as our long-term 5% real return objective, and we expect it will outperform peer school averages when those results are reported in the coming months. Notably, the Investment Pool was valued at $2.3 billion at year-end, a new high-water mark, and a more than $250 million increase from last year.

A question we hear often is “are we in a bubble?” and, if so, should we consider tactical shifts in how the Investment Pool is invested in order to reduce risk? In short, we cannot answer the first question, and we believe the answer to the second question is “no.” While we implement asset allocation changes over time, these shifts are generally modest and are always done with a long-term perspective. For example, the U.S. public equity market was viewed by many to be meaningfully overvalued a year ago; in actuality, U.S. equities (represented by the S&P 500) returned a remarkable 25% over the past year, well in excess of Williams’ overall portfolio return. Williams having maintained meaningful exposure to the U.S. equity market contributed materially to a successful year.” (Source)

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Top Williams College Endowment Fund Headlines:

1) Williams College tops Forbes’ 2014 rankings of The Top 100 U.S. Colleges (p. 86). The 7th annual rankings, calculated exclusively for Forbes by the Center for College Affordability & Productivity (CCAP), are featured in the August 18, 2014 issue of Forbes magazine, and online at www.forbes.com/top-colleges. Williams College edged Stanford University out of first place and into the No. 2 spot on this year’s rankings, which focus on educational outcomes, teaching quality, student satisfaction, graduation rates and student debt levels.  Swarthmore College moved up to No. 3 from 6th place last year, followed by Princeton University (No. 4), and Massachusetts Institute of Technology at No. 5. (Source)

2) Williams College, ranked first among U.S. liberal-arts schools, plans the biggest borrowing in its 220-year history as education debt trails the $3.7 trillion municipal market by the most since 2010. The private college, 135 miles (217 kilometers) northwest of Boston in the Berkshire Mountains, is set to sell $154 million tomorrow, its first issue since March 2011, said Fred Puddester, treasurer for the school. Proceeds will refund bonds for about $500,000 of annual savings and finance new academic and athletic facilities, Puddester said. Bonds for education, which includes public-school construction debt, have earned 1.2 percent this year, lagging behind the 1.4 percent gain for the municipal market, Bank of America Merrill Lynch data show. While investors favor colleges’ stronger ratings, they’re drawn to weaker credits with higher yields, said Nancy Andes, senior underwriter of fixed-rate munis at Wells Fargo Securities LLC in Charlotte, North Carolina. (Source)

3) The social choice fund at Williams College in Massachusetts is an early example of this. Due to resistance from the college, social choice fund supporters initially created an independent community development fund to prove the effectiveness and support around a social choice fund. After a two-year campaign involving faculty, staff, parents, and alumni, Williams College announced the creation of a socially responsible investment fund within its endowment portfolio in October of 2001. Despite success at Williams College and many other universities, creating a social choice fund for university endowment money has not become much easier. Passionate student activism is still at the heart of these efforts. (Source)

4) Collette Chilton was appointed as the first Williams College Chief Investment Officer in October 2006. She is responsible for the investment of approximately $1.8 billion in assets held by the Williams College endowment. She supervises the College’s investment office and serves on the President’s Senior Staff.  Previously, she served as President and CIO of Lucent Asset Management Corporation with responsibility for $40 billion in retirement assets. She is a member of the investment committee at Dartmouth College and a member of the board of the Center for Private Equity and Entrepreneurship at The Tuck School of Business, where she received her MBA. (Source)

5) At No. 1, Williams College is 2014′s leading higher education institution in the U.S., followed by Stanford University and Swarthmore College. The first Ivy League school to show, Princeton University, comes in at No. 4. Two other Ivies make the top 10: Yale University at No. 6 and Harvard University at No. 7. Rounding out the 10 finest schools in America are Massachusetts Institute of Technology, Pomona College, U.S. Military Academy and Amherst College. (Source)

 

About Richard C. Wilson