Archive for the ‘Newsletter’ Category

Scott Malpass and Notre Dame: Keeping the faith for 32 years

03 / 31 / 2021
by Charles Skorina | Comments are closed

The most notable CIO-centric event of 2020 in the endowment world was undoubtedly the retirement of Scott Malpass as chief investment officer at Notre Dame.

Mr. Malpass was just a dewy 25 years old and relatively inexperienced when Notre Dame recruited him as “assistant investment officer” in 1988.

He was already effectively in charge that year, but decorously waited for his predecessor to retire in 1989 to officially take the CIO title.

In 2020 he punched out as smoothly as he had punched in.

His successor, Michael Donovan, had been Mr. Malpass’ wingman for 20 years. They had been undergraduate classmates (and roommates) in ND’s class of 1984, making them both about 58 in 2020.

Although he is ferociously devoted to his school, Mr. Malpass chose not to hang on until standard retirement age. Instead he passed the baton early enough to leave plenty of career runway for his colleague and successor.

Badly executed successions can be ruinous in institutional investing. The examples have been too notorious to list. This is how the pros do it.

Mr. Malpass had 32 years in harness when he stepped down last year and was the longest-serving endowment CIO we know of, with the prominent exception of Yale’s David Swensen, 35 years and counting.

Longevity is great (at least for the incumbent) but it’s performance that counts. And, although the Yale endowment is far more prominent, Notre Dame’s performance has been remarkably good, and only very slightly behind the top northeastern schools. Casual observers may have missed that.

Mr. Swensen has earned his fame. But we suspect that the attention paid to Yale and the relative inattention to Notre Dame has much to do with the regional chauvinism of the financial press.

For the media, a Catholic college in Indiana will never have quite the cachet of the Ivy League.

Take a look at our 5-year performance numbers below. Allowing for ties, the 5-year return ranking is:

No. 1: Brown (9.8)

No. 2: MIT (9.0)

No. 3: Rockefeller/ Bowdoin (tie) (8.5)

No. 4: Yale/ Dartmouth/ UTIMCO (tie) (7.8)

No.  5: Notre Dame/ Princeton/ Williams (tie) (7.7)

By this reckoning, the recent performance of the Notre Dame Model is just a whisker behind the Yale Model. In fact, Notre Dame beat Yale in 3 of the last 4 years.

This is so interesting that we thought we should reach back to our longer-term Yale versus Notre Dame dataset.

Twenty years is a nice, round number, and we can’t think of any other such pairing that could put the same two long-serving CIOs head to head. But we pushed back 21 years to capture the Dotcom Meltdown beginning in the second half of that fiscal year.

Notre Dame versus Yale endowment performance

FY 2000-2020

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Building the Next OCIO Powerhouse

02 / 18 / 2021
by Charles Skorina | Comments are closed

Growing a discretionary asset management or investment advisor business is tough.

We have yet to see an independent Outsourced Chief Investment Officer firm reach $100 Billion AUM through organic growth.

Most of them will never even reach $20 Billion.

Of the thirteen firms managing $50 billion or more on our annual OCIO list, only one – Alan Biller and Associates – launched as a pure-play OCIO and consulting start-up.  And they’re just over the $50 Billion line.



Over $100bn AUM



(as of 6-30-20)



Russell Investments






Goldman Sachs


AON Hewitt


Willis Towers Watson


State Street Global Advisors







$50bn to $100bn AUM



(as of 6-30-20)

Northern Trust


Wilshire Associates


JP Morgan Asset Mgmt




Alan Biller and Associates




Total OCIO assets have been growing briskly, at more than 15 percent annually (In the 12 months July 2019 to June 2020).Most except Biller began as financial mega-firms long before OCIOs were even invented. Several have roots stretching far back into the nineteenth century. JPM goes all the way back to the 1800s!

Independent OCIOs and RIAs have not been able to grow their way into this select company, and probably never will.

Why is this?

But it’s scattered among dozens of relatively small firms.

The solution seems obvious: Do it the old-fashioned way. Grow by acquisition and aggregation. Buy, sell, and merge firms. That’s how the mega-financials have done it.

It’s a well-understood historical process. Railways, utilities, steelmakers, banks, brewers, hotels, airlines all grew like this.

The boffins at Harvard Business School call it the Industry Consolidation Lifecycle. (See:  It’s easy to see after the fact, but much harder when we’re all floundering through it in real time.

And yet, for most OCIOs under $50 Billion, there seems to be a deep aversion to mergin’.

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Joseph Boateng: Investing for Children in Need

11 / 09 / 2020
by Charles Skorina | Comments are closed

Our November letter looks at one of the country’s biggest and most effective operating foundations – the $2.5 billion AUM Casey Family Programs (CFP) in Seattle – and Joseph Boateng, the man who manages the money.

An “operating” foundation uses most of its resources to run its own, internally-managed charitable programs. Among the 86,000 foundations in the U.S. totaling $715 billion in assets, almost all are grant-makers. Only 5 percent run their own charities as CFP does. This has implications, as we shall see, for their investment program.

In 1907, 19-year-old Jim Casey and his 18-year-old pal Claude Ryan between them had one bicycle and $100 borrowed from a friend. They set up the American Messenger Company, operating out of a hotel basement in Seattle. The automobile was still a novelty and aviation barely existed. His brother George and a few friends worked as messengers.

The tiny bike-messenger company grew into mighty UPS, with an enterprise value of over $100 billion and which now moves its packages on its own aerial fleet (UPS Airlines), flying hundreds of giant jet freighters all over the globe. Not to mention 96,000 trucks, vans, tractors and even motorcycles. Alas, no bikes.  

When Mr. Casey died in 1983 he’d turned his borrowed $100 into a personal fortune of $100 million. Most of that went into the CFP operating foundation and the related grant maker Annie E. Casey Foundation. The former is still sited in Seattle, while the latter – also focused on child welfare – is in Baltimore.

For any of our readers who lives have been touched by foster care, you know Casey. 

President and CEO William C. Bell, Ph.D., a former New York City commissioner for Child Services, joined CFP in 2004 and became CEO in 2006. A year later the Casey Board recruited Joseph Boateng to work with Dr. Bell as the foundation’s first and only CIO, bringing the investment portfolio inhouse. It had been previously managed externally by Russell Investments.

CFP’s charities, despite their altruistic aims, have budgets, expenses, and many commitments to meet, like any big business. But revenue comes through a single pipe: investment returns on Jim Casey’s original endowment.

For CFP, any unexpected shortfall in investment revenue means either a cut in programs for kids, or an invasion of the corpus. Both are unacceptable.

For fourteen years, Mr. Boateng has managed to produce that steady income while walking an investment tightrope.

Kim Lew, the new CIO of Columbia University, previously managed investments at the Carnegie Corporation, another major private foundation. As she told us in our recent interview:

A private foundation is not a university endowment. We don’t have rich alumni we can go to for help if we take an unexpected haircut.  We have constraints which demand close attention to liquidity. That means we can’t lay out sixty to seventy percent of the portfolio in private equity, venture capital, timber, and other assets which might take years to sell.

Joseph Boateng, an American Success Story

Mr. Boateng was born in the west African republic of Ghana, son of a prominent local leader. 

There were early signs of his business acumen. During his student leader days at the University of Ghana, Joseph launched a number of innovative programs for small business owners including education sessions and seminars on accounting, business development, and cash management.

AIESEC International even gave him an award for the most Innovative Program of the Year Award at their Annual International Congress in Innsbruck Austria in 1987.

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Kim Lew, Columbia Endowment’s next CEO, Shattering the Glass Ceiling

09 / 08 / 2020
by Charles Skorina | Comments are closed

African-American investment professionals. . . better late than never!

Last week Columbia University announced that Ms. Kim Y. Lew, chief investment officer and thirteen-year veteran of the Carnegie Corporation, will join Columbia’s $10.9 billion Investment Management Company as CEO on November 2nd.

She won’t have far to move. Her new office is located about eight blocks south and three blocks east of her present location in mid-town Manhattan.

This hire is a big deal and the search committee -- Columbia University’s board of directors, President Lee C. Bollinger, and EVP of finance Anne Sullivan -- shattered several glass ceilings when they welcomed Ms. Lew on board.

Gender is a formidable barrier for females in finance. On our latest list of the top one hundred endowment chief investment officers pre-Ms. Lew, there are only sixteen women.

[This is pre-Kim Lew and Brooke Jones, both moves announced last week.  Ms. Jones was Kim Lew’s investment director and will move to Bryn Mawr College as CIO next month. Dekia Scott, 19 years at Southern Company, was promoted to CIO in June]

Fortunately, Columbia’s search committee was more interested in talent and ability than race, gender, or religion when they selected Ms. Lew.

[Our full interview with Ms. Lew is just below]

We see a lot of boilerplate in the nonprofit world about how “we don’t discriminate.”

But, truth be told, if you are a woman, or more pointedly, an African-American woman in asset management, you face gale-force headwinds as you scale the institutional precipice.

How bad is it?

For over thirty years we have followed the careers of several thousand investment heads at Wall Street investment and money center banks, hedge funds, insurance companies, and nonprofits.

Within our global database we have about six-hundred-fifty chief investment officers at endowments, foundations, hospitals, public pensions, associations, and charities. . . yet we can find only fifteen African-American CIOs among them, a minuscule two percent, of which, with the recent promotions of Ms. Jones, and Scott, seven are female.

The dismal reality is that an African-American woman working in institutional investment management has a better chance of storming her way across the Korean DMZ than becoming a chief investment officer at a major American endowment or foundation.





Kim Y. Lew, CEO (Oct 2020), Columbia U Investment Mgmt. Co.

Brooke Jones, CIO (Oct 2020), Bryn Mawr College

Charmel Maynard, CIO/Treasurer, U of Miami, FL

Frank Bello, CIO Howard U

Robert "Danny" Flanigan Jr., CIO/Treasurer, Spelman College



Joseph Boateng, CIO, Casey Family Programs

Rukaiyah Adams, CIO, Meyer Memorial Trust

Nickol Hackett, CIO, Joyce Foundation

Bola Olusanya, CIO, The Nature Conservancy



Dekia M. Scott, CIO, Southern Company

Bryan Lewis, CIO, US Steel



Mansco Perry III, ExecDir/CIO, MN State Board of Investments

Angela Miller-May, CIO, Chicago Teachers’ Pension Fund

Cheryl Alston, CIO, Employees Retirement Fund City of Dallas

Alex Done, CIO, Bureau of Asset Management, NYC retirement system


Source: Charles Skorina & Company

[Our apologies if we have missed anyone. Please email me if you’re not on the list]

Kelli Washington, managing director of investments at the Cleveland Clinic, wrote an excellent op-ed piece for ai-CIO magazine about what it’s like to be an African-American woman in finance.

And Vicki Fuller, former CIO at the New York Commons, was kind enough to share her views on being female and African-American on Wall Street and at the Commons in our interview two years ago.

We should mention that Columbia is not the only eminent New York institution to give women and minorities a fair shot.

The honorable Thomas P. DiNapoli, state comptroller, has led the charge for years, promoting Raudline Etienne, then Vicki Fuller, and now Anastasia Titarchuk to the top investment position at the $207bn New York Commons.

But, as we see from the data, these are rare exceptions.

When I interview women in the investment industry and ask how they first became interested in investment finance, it’s almost always because early on they had a role model.

Someone in the family or a family friend, someone they met in high school or college who worked in finance and took the time to explain what they did and why they liked the job.

Let’s hope the entire investment community will follow Columbia’s example and hire, develop, and promote more role models like the intrepid band of women (and men) cited in this piece.

Ms. Kim Y. Lew, a Bronx Story

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Endowments and Donors Can’t Save Higher Ed

08 / 24 / 2020
by Charles Skorina | Comments are closed

American colleges, cultural institutions, and health systems are in deep trouble.

Tuition, room and board revenue, government aid, donor gifts, visitor and patient revenue have all collapsed.

Staff and pay cuts have hit many of the well-known institutions we work with and more are in the works.

College campuses are hard hit

Terry Hartle, senior vice president at the American Council on Education, estimated in a recent PBS interview that colleges and universities have taken an aggregate twenty percent hit to their budgets so far in 2020.

Most schools think 2021 will be much worse.

The late Harvard professor Clayton M. Christensen (The Innovator’s Dilemma) predicted a few years ago that half of America’s 4000 colleges and universities would go bankrupt in the next decade or two, as online education “disrupts” the business models of traditional institutions and runs them out of business.

With the accelerated shift to on-line learning thanks to the Covid-19 crisis, parents and students are up in arms against the price of a college education.  Mr. Hartle cites $8 billion in refunds this spring just for room and board cancellations.

The cost crisis in higher education has been fermenting for years as states cut education budgets and colleges jacked up tuition and fees.

Scott Galloway, professor of marketing at NYU, points out that tuition has jumped two-and-a-half times in twenty years while the educational “product” has essentially stayed the same.

But the reckoning was delayed by waves of full-fee foreigners and full-recourse student loans.

As students grow accustomed to remote coursework, one wonders how many families will be willing to pay forty thousand and more per year for an off-site experience indistinguishable from every other.

Endowments and donors can only do so much

Our system of higher education – including the great private universities and the endowments that support them – is a key asset in our national preeminence.

Endowment capital has been a bedrock source of support for generations of students and faculty, but it takes a long time to accumulate and it’s very tempting to plunder.

Cambridge, the wealthiest university in Europe, took over 800 years to amass an endowment of $9.3 billion. Harvard's $41 billion took 382 years to accrue. Upstart Stanford University grew its endowment to $27.7.4 billion in "just" 135 years.

And that "hoarded" wealth drove performance; American universities dominate the rankings of global higher education.

Denuding a university's long-term legacy to plug short-term budgetary holes may be politically expedient but it merely postpones the inevitable plunge off the fiscal cliff.

Time to cut the fat

Voluntary support from alumni, foundations, corporations, and religious groups have helped our higher-education system grow at an unparalleled rate while achieving remarkable diversity and unquestioned world leadership.

But donors, endowments, and flush foreigners can’t save higher education from the inescapable abyss without fundamental changes in costs and delivery.

Re-engineering and re-pricing the college experience at a level families can afford is daunting but essential if we wish to maintain the level of excellence we’ve enjoyed since our nation's beginning.

University alumni and endowment staffs have stepped up time and again to support their schools when the going got rough.

It’s time for our universities and colleges administrators to do the same.

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