After reporting its endowment results last year, the school shared what changes they were making.
Over the last year, the Office of University Investments made several changes to its portfolio strategy and management, including revamping its benchmarks, strategic asset allocation, managerial lineup, operational capabilities and informational systems. These efforts are intended to boost performance over time, increase endowment flexibility, reduce fees and improve responsiveness to changing investment trends.
One major change was moving its investment office from Ithaca to New York City.
Cornell CIO Kenneth Miranda, who took the reins on July 1, gives the impending relocation his full support, noting in the university’s announcement that “the full merits will take time to achieve, but the decision is extremely supportive of the goals of the office.” Cornell has already established a New York presence with the Weill Cornell Medical School and the anticipated 2017 opening of the Jacobs Technion-Cornell Institute at Cornell Tech engineering school.
They are also removing fund managers from their portfolio.
“When I came, we had, I think, 400-plus accounts” or investment vehicles, Miranda says. “We still have an awful lot. We had 190 different managers. And we’re slowly squeezing it down. Our goal is 120 accounts and 70 managers. As we do that, we’re concentrating with higher-conviction managers and getting certain types of fee breaks because we’re consolidating assets.” U.S. equities, among other assets, needed full Marie Kondo–ing, the CIO found during a methodical portfolio review. “They all had the same sort of strategy, so when one underperformed, they all underperformed.”
But it will be years before we see the result.
“We have a relatively new chief investment officer who has moved our investment office to NYC and who is busy restructuring our investment portfolio,” said Ronald Gordon Ehrenberg, Director of the Cornell Higher Education Research Institute and Irving M. Ives Professor of Industrial and Labor Relations and Economics. “This restructuring necessarily takes time because it takes time to liquidate many of our endowment’s assets. So let’s wait a few years before judging how he is doing.”
Post by Marcelino Pantoja