Archive for the ‘NEWS AND COMMENTARY’ Category

Latest Endowment Performance Rankings

05 / 01 / 2021
by Charles Skorina | Comments are closed

Our 2020 endowment performance report features ten-year returns -- the latest available.  We consider a ten-year span to be a rigorous and revealing measure of the strength of an institution’s oversight and long-term investment abilities.

However, as always, there are caveats.

Timing

Most endowments close their books for the fiscal year on June 30 then prepare for the auditors.  Soon thereafter, usually in mid to late fall, the schools release preliminary performance results.

These numbers are “official” but Non-Time Matched because private market performance reporting – real estate, private equity, etc. – lags public market results by three to six months, and sometimes longer.

Usually, this does not matter because public and private market investments tend to move pretty much in sync.

However, in spring 2020 with covid on the loose, the June 30th fiscal close missed a big uptick in private market valuations because those numbers were not ready and therefore not reported to the investment offices.  This hit big endowments hard, those with heavy allocations to alternatives.

Costs

Not all returns are equal.

Some schools report their numbers net of all costs including external management fees, internal office costs, and the endowment tax.

However, many endowments when computing their returns subtract external management fees but not office costs or the endowment tax.

Over a ten-year period that makes a difference.

Turnover

Turnover affects performance.  Only about a third of the one hundred CIOs on our list have held the top investment position for ten years or more and they tend to have the best performance

For example, in our chart below, ten of our top fifteen endowments by 10-year performance had investment heads with ten years or more in tenure.



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Jon Hirtle and the OCIO Juggernaut

12 / 01 / 2020
by Charles Skorina | Comments are closed

OCIO Growth Tops 15.8 Percent in 2020

Our latest Outsourced Chief Investment Officer report features a list of 104 OCIO firms, each with updated contact information and AUM numbers. It’s the most comprehensive and accurate available.

We also have a deep-dive interview with Jon Hirtle, a pivotal leader in the industry he helped create.

We invite both institutions and high-net-worth families to check out our list – below and on our website – and call a few of the firms if you’re in the market for money-management help.

It may not be as exciting as Tinder, but it could still be the start of a beautiful new relationship!

Observations on a Plague Year

2020 was a strange and tumultuous year.

But, after trudging through a cruel pandemic, rancorous politics, and vertiginous markets, there still seems to be some hope left in the world.

In the OCIO industry, for example, managers have amassed an additional $431 billion AUM over the last twelve months, topping out at a record $2.812 Trillion as of 30 June 2020.

That’s a year-over-year growth of 15.8 percent!

And yet, as we’ve noted in past reports, the same big six  – Aon, Blackrock, Goldman Sachs, Mercer, Russell, and Willis Towers Watson – still manage almost half (45%) the OCIO money.

A few firms sold themselves to larger players in 2020. Athena Capital Advisors joined Franklin Templeton, Focus Financial Partners acquired CornerStone Partners, and private equity investors CC Capital and Motive Partners teamed up to buy Wilshire Associates.

We've been charting the growth of the OCIO industry for over a decade in our annual OCIO reports and the heirs of Hirtle, big and small, seem (mostly) to have flourished.

Jon Hirtle of Hirtle Callaghan hatched the concept of an “independent investment office” managing family and institutional money over thirty years ago.

The idea was conceptually simple, but not necessarily easy to execute – or to market: take the proven success of sophisticated multi-billion-dollar investment offices and deliver those same benefits to smaller institutions and high-net-worth families at fees they could afford.

Four decades later we see not only independent firms like Hirtle Callaghan and Alan Biller and Associates, but also giants like JPMorgan, Blackrock, Vanguard, and AON; and boutiques like Edgehill and Disciplina. It’s a big, wonderfully diverse industry and, as we’ve seen, still growing briskly.

Jon Hirtle and the OCIO Juggernaut

Mr. Hirtle was born in a small town outside of Pittsburgh. He had a very American boyhood; working with horses, learning to fish, camping with the Boy Scouts, and playing football.

At fifteen he and a classmate hiked several hundred miles on the Appalachian Trail – by themselves. The following summer he landed a job in Wyoming after typing (remember typing?) 100 letters to all the ranches advertising in the back of Outdoor Life magazine.

That first summer in Wyoming he dug ditches, built fence, rode broncs (the fun part according to Jon) and fell in love with the west.

As a Penn State undergrad he studied pre-veterinary medicine, walked onto the football team, appeared in musicals, joined a fraternity and, most importantly, met Debby, his wife of over 40 years and counting.

After graduation, Jon joined the Marines where he earned honors in officer training, led troops overseas, trained recruits at Parris Island and finally, returned to Penn State to recruit more candidates for officer training and earn an MBA.

After the Marine Corps he headed for Wall Street and Goldman Sachs.

And that’s where the story of OCIO begins.



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Cambridge Elevates Recently Appointed President to CEO

05 / 14 / 2016
by Charles Skorina | Comments are closed


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Institutional Investor article on CAS pay for performance

03 / 21 / 2012
by Charles Skorina | Comments are closed

Mellon’s John Hull Tops Non-Profit CIO Pay Rankings

Institutional Investor – March 15, 2012  •  Frances Denmark

Charles Skorina had a problem. As an executive search consultant specializing in filling investment officer holes at pension funds and endowments, he was often asked by boards of trustees to produce metrics to aid in candidate comparisons. But in his 30 years in the search business, such data had proved hard to come by ­— that is, until late January. That’s when Skorina’s “CIO Performance-for-Pay” ranking (see chart below) hit the institutional investor zeitgeist.



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Bloomberg: Help Wanted on Campus – Top U.S. universities are looking for a new breed of investment manager who can be nimble in tough times.

08 / 18 / 2010
by Charles Skorina | Comments are closed

Bloomberg: Help Wanted on Campus

By Gillian Wee - Aug 18, 2010

Bloomberg Markets Magazine

 

Top U.S. universities are looking for a new breed of investment manager who can be nimble in tough times.



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