To the uninitiated, investing seems like a lot of number crunching. But after enough time practicing it you realize that investing is more art than science.
Fortunately for Bowdoin their endowment CIO came from the art world.
Ms. [Paula] Volent found her way to asset management through a circuitous route. After receiving a degree in art history and chemistry from the University of New Hampshire, she took a job at the Bowdoin College Museum of Art in 1980 with the intention of making a career in art conservation. She later earned an advanced degree at New York University’s Institute of Fine Arts and worked at several other museums: the New-York Historical Society, the Palace of Fine Arts in San Francisco and the Los Angeles County Museum of Art.
While running her own paper conservation studio in Los Angeles, Ms. Volent began taking business courses at the University of California, Los Angeles, and realized that she had an aptitude for numbers.
But she discovered her vocation in asset management at Yale, where she earned a master’s in business administration. She also worked at the university’s endowment under David F. Swensen, who has mentored many portfolio managers and developed a highly regarded strategy that includes investments in alternative asset classes like real estate, hedge funds and private equity.
This former curatorial assistant transformed a small endowment after her time with Swensen.
Also extraordinary is how the Yale cohort has changed the field. “It used to be,” explains Volent, who is now in her 19th year at Bowdoin, “that endowments were pretty sleepy.” Endowment managers “just invested in stocks and bonds, railroad stocks, maybe some faculty housing.” But now, for example, Bowdoin’s portfolio “is very global; we’re looking at opportunities in China, Latin America, and emerging markets and the endowment portfolio has significant investments in alternatives including venture capital, private equity, and hedge funds.” During Volent’s time there, the Bowdoin endowment has grown from $465 million to $1.6 billion, thanks to a 9.2% annualized investment return.
And her portfolio continues to outperform.
The Bowdoin investment return of 15.7 percent compares with the median return of 8.3 percent for all college and university endowments during this period as reported by Cambridge Associates, a firm that tracks the performance of foundations and endowments nationwide. As of June 30, 2018, the three-, five-, and ten-year annualized returns for Bowdoin’s endowment were 8.6 percent, 11.8 percent, and 8.8 percent, respectively—all in the first percentile among comparative college and university annualized returns, where the respective median returns were 6.1 percent, 7.3 percent, and 5.5 percent.
Post by Marcelino Pantoja