"MIT endowment chief tops Harvard money managers; Portfolio grows $2.4b over 9 years" by Beth Healy Globe Staff June 18, 2015
In the realm of ivory tower rivalries, one might expect the Massachusetts Institute of Technology to outdo Harvard University when it comes to science and engineering, even in high-tech start-ups.
But managing money?
It’s true: MIT has outperformed Harvard over the nine years since Seth Alexander became president of its endowment. The $10 billion portfolio that he inherited now weighs in at $12.4 billion, the sixth-largest among US colleges.
Alexander, 41, learned the investment profession at the elbow of a famed Yale University endowment chief, David Swensen. Since arriving at MIT in 2006, Alexander has produced average annual investment returns of 9.3 percent, among the best in the university endowment world. Those gains handily outpace a 7.9 percent annual average at Harvard’s $36.4 billion fund and come close to the 9.5 percent posted by his mentor at Yale.
Alexander is a bargain in his field, earning $1.2 million in 2013, the latest year for which compensation data are available. The top-paid managers running Harvard’s endowment earn 10 times as much.
See: Ex-Harvard endowment chief earned nearly $10 million in 2013
Did you see from where they are getting the money?
“MIT is getting their money’s worth,’’ said Charles Skorina, an executive search consultant in San Francisco who tracks the endowment world. “Seth is just quietly doing well.”
It’s a turnaround from the 1990s and early 2000s, when Harvard’s fund, then run by Jack Meyer, and Yale’s, under Swensen, were the heavyweights of the endowment world. MIT was much smaller and barely on the radar.
Alexander declined to be interviewed, and MIT officials said they didn’t want to talk about their endowment chief, either.
A Yale graduate with a biology degree, Alexander joined the investment office of his alma mater in 1995 and was soon teaching a class on managing endowments.
In New Haven, he became part of a cadre of Swensen assistants who have gone on to run endowments at other prominent schools, including Princeton University, the University of Pennsylvania, Wesleyan University, and Bowdoin College.
Alexander had a particularly good year at MIT in 2014, delivering a 19.2 percent return, compared with Harvard’s 15.4 percent. But he has lagged behind Harvard in most bull market years. Alexander has outperformed over time largely by losing less than his rivals in bad years.
Consider 2009, when the entire investment world nearly collapsed.
The massive Harvard endowment plunged 27 percent; Yale’s lost nearly a quarter of its value. MIT took a hit, too, but fell by a relatively modest 17 percent. The average loss for US endowments and foundations was 19 percent that year, ended June 30, 2009, according to the National Association of College and University Business Officers.
In 2012, when most everyone’s performance was flat or down, MIT pulled out an 8 percent return, nearly double Yale’s 4.7 percent gain.
“Sometimes you just have a year when things come together,’’ Alexander told a group of MIT alumni that year.
Allen Bufferd, MIT Investment Management Co.’s first president, said creating stable performance is a key to success.
“Broadly speaking, the lower the volatility of results — by which I mean the up-down, up-down,’’ Bufferd said, “you’ll come out better.” Most importantly, he said, “This is not a one-year game.”
Bufferd retired in 2005 after 33 years at MIT, 18 of them as its chief investment officer.
MIT uses the so-called Yale model of investing, developed by Swensen and now widely used by large endowments, foundations, and pensions. It is based on a belief that an endowment with money in a wide array of asset classes, like venture capital, real estate, and hedge funds, can do better than a portfolio of just stocks and bonds.
While at Yale, Alexander was steeped in this method, specializing in timber, asset allocation, hedge funds, and international investments, according to his Yale biography. He also coauthored a paper on alternative investments, like venture capital and private equity.
On the side, he handled more basic finances, keeping the books for a New Haven food pantry — paying the bills, overseeing payroll, and helping with annual budget projections.
“He was supportive of us and very much interested in the mission of the soup kitchen,” said David O’Sullivan, executive director of the Community Soup Kitchen. “He wanted to know what was going on, how many meals we were doing.”
I'm so grateful the 1% are taking such good care of the rest of us. It's the most compassionate corporate cla$$ ever; just ignored that designed yawn of wealth inequality and your dropping standard of living.
Alexander hasn’t had much chance to let success go to his head.
Schools like Harvard and MIT rely heavily on endowment income to run their operations. Even though the MIT endowment beat rivals in 2009, the school laid off 174 employees between January 2009 and June 2010, according to a spokeswoman. It also had to cut its budget by millions of dollars, in what officials recall as a painful time.
“As much as you want to say to yourself, well, one year doesn’t matter because we’re focused on 10 years, psychologically it does — it does matter,’’ Alexander told alumni in a speech videotaped in 2012. “Because it can influence your thinking, it can influence your mood.”
But as the economy and markets recovered, MIT had less ground to recover from its losses than many of its peers.
Related: Buying Back Stock
They have "recovered"; they rest of us have not, I don't care what the corporate swill says.
Since 2008, the MIT endowment has added $2.5 billion to its coffers, reaching $12.4 billion, while Harvard’s assets have not returned to their $36.9 billion peak. Yale has added $1 billion to the portfolio in that period.
And yet somehow jobs and consumer spending is lagging.
MIT marketing documents and the Alexander video say the fund takes a “value” approach, by hunting for bargains and scouting out smaller, start-up investment funds where MIT is the first endowment involved.
“We won’t engage in speculation,’’ Alexander said in the video. “We’re not going to buy high-flying growth stocks in hopes that they’ll keep going up.’’
What do you call real estate investments and the rest?
That can mean missing out on gains in frothy times.
Ah, the FROTH of the Fed printing press! Really, folks, do they think they are fooling anyone or just talking to themselves?!
Alexander and his colleagues like getting into hot initial public stock offerings, like those for Facebook and LinkedIn, he said, but only in the early days when they’re still private, and still cheap.
While Harvard manages some money itself, MIT farms most of its funds out to independent firms to invest.
Then why is this guy getting all the credit? Whose pimping, 'er, promoting him?
Ten of the 14 new managers MIT hired in 2011 and 2012 had no other endowment clients, Alexander said. Eight of the 14 were small, with less than $200 million in assets.
“We are pursuing a different path than other people,’’ Alexander said.
I should do that and get off the Globe trail.
Amidst all the $elf-adualting back-$lapping this wasn't even mentioned:
"MIT panel backs divestment from coal, tar sand firms" by Peter Schworm Globe Staff June 17, 2015
In a sweeping new report, a climate change committee at MIT has thrown its support behind targeted divestment from coal and tar sand companies and called for the creation of a new institute dedicated to global warming.
Nice move seeing as their largest benefactor is the world's biggest polluter and it will benefit as banks save the world!
The 52-page report, released this week, described climate change as “society’s grandest challenge of the present day, possibly of all time,” and urged broad action in confronting it.
“The time has come for MIT to play a prominent, visible part in the action and solutions needed to confront the climate challenge,” the report stated.
Ironically, the oil industry agrees with you:
Top European oil producers call for carbon pricing
At least the EPA is looking out for the water and the promised land -- even if agenda-pu$hers are playing both sides. But you go and believe that fart-misting gas even as your senses tell you different. You go and believe that $cience and look to the stars!
Final recommendations will be presented to Massachusetts Institute of Technology President Rafael Reif this summer. Reif is expected to unveil a climate change plan this fall.
Maria Zuber, MIT’s vice president for research, said in an email to the campus community that the report delivered “an exceptionally constructive and illuminating process for exploring the most effective strategies for climate action.”
Students and faculty have called on the Cambridge university to divest its $12.4 billion endowment from fossil fuel companies, joining a growing movement on US campuses.
I notice the BOYCOTT, DIVEST, and SANCTION MOVEMENT regarding ISRAEL never gets much play in my jew$paper.
The report, which culminates a yearlong discussion on climate change, rejected the idea of blanket divestment from all fossil fuel companies, raising concern that it would likely hinder the university’s relationships with such companies.
Oh, so this is all a lot of HOT AIR!
The committee also warned against “lumping together firms that differ dramatically in their roles in the climate issue.”
A lot of that going on these days!
But the panel supported divestment from companies whose operations are “heavily focused” on exploration and extraction of fuels such as coal and tar sands that are “among the most carbon-intensive and environmentally hazardous fossil fuels.”
Tar sands, also known as oil sands, can be mined to extract bitumen, a thick substance that can be refined into oil.
They must be against Keystone then.
The panel concluded that shedding their investments would not likely have a sizeable impact on endowment returns.
Jeremy Poindexter, a graduate student and member of Fossil Free MIT, said that while he would have liked to see the panel call for broader divestment, he was pleased by the show of support.
“It’s very promising it’s been endorsed in this report,” he said. “This is an opportunity for MIT to step into the spotlight and take a leadership role.”
Earlier this month, a large group of MIT faculty members signed a letter to Reif in support of divestment, saying the move would represent “one of the clearest and most powerful ways to demonstrate our seriousness about tackling catastrophic climate change.”
The SKY-IS-FALLING TACTICS have FAILED, fart-misting f***.
Besides, we have terrorists in our midst that are a far greater threat.
“Many fossil fuel companies have a proven record, past and present, of actively working to obscure the scientific consensus around climate change,” the faculty wrote. “By continuing to invest in these companies, we knowingly endorse efforts to undermine MIT’s commitment to scientific analysis and practical action for the betterment of humankind.”
Yup, MIT and all the elite schools and classes care about the betterment of mankind and not their own greed. Maybe they believe that, or have to tell themselves that, or are only speaking to each other here because the shape of the planet belies the words.
As for the $cientific con$en$us....
The divestment movement has gained momentum on campuses in recent years. Last year, Stanford University announced it would divest from coal companies, and Georgetown University recently followed suit.
So when do the controlled-opposition kids start protesting debt-enslaving banks and the wars that are robbing them of their future, or is the Globe just not covering those?
Other schools, such as Syracuse University and Hampshire College, have pledged to divest their entire portfolios.
The best little college in the whole wide world.
This spring, students at Tufts University held a 55-hour sit-in to protest fossil fuel investment, and students at Harvard blocked administrative buildings. At Yale, police arrested 19 students in a campus protest against fossil fuel investment.
Kids were just letting off steam.
But most colleges have rejected the idea of divestment, saying it is unlikely to bring about change and could carry a substantial cost.
“Divestment is likely to have negligible financial impact on the affected companies,” Harvard President Drew Faust wrote in 2013. “And such a strategy would diminish the influence or voice we might have with this industry.”
Fossil Free MIT urged administrators to adopt the recommendations, which include putting a price tag on its carbon use and creating an ethics advisory council to assess investments.
“We reject the notion that ethics should play no role in investment,” the report stated.
They reject Wall Street?
Geoffrey Supran, a graduate student on the committee who backed the recommendations, said the proposals could establish MIT as a leader in combating climate change.
“I hope it will be a watershed moment,” he said. “It really builds on a year of unprecedented momentum.”
"The family of a University of Massachusetts Amherst student killed when she was struck by a vehicle has filed a wrongful death lawsuit against the driver. The Daily Hampshire Gazette reported that the parents of Hannah Frilot, 20, said in the suit filed Monday that the driver violated several laws when her vehicle struck their daughter last July. Frilot, of Scottsdale, Ariz., was walking her bicycle in a bike lane in Amherst when she was struck from behind by Cynthia May, 64, of Orleans. Paramedics pronounced her dead at the scene. May has pleaded not guilty in Superior Court to negligent motor vehicle homicide (AP)."
Speaking of UMass, what is their endowment like?
NDUs: Drive to dump coal stocks won’t bring any clean results
"Greenpeace says 13 protesters in kayaks tried to block Royal Dutch Shell’s drill rig from leaving Seattle to explore for oil in the Arctic Ocean. Spokeswoman Cassady Sharp said the Coast Guard arrested several of the ‘‘kayaktivists’’ who confronted the Polar Pioneer at 4 a.m. Monday. She said 40 to 50 supporters in kayaks and canoes lined up behind the group’s blockade. The petroleum giant’s plans to drill in the waters off Alaska drew a similar protest in May. Activists have also chained themselves twice to a support ship in Bellingham, Wash."
Yeah, well, Greenpeace was caught lying and admitted they use fear tactics to win arguments. When you need to use lies and fear to win your argument, you've already lost!
This reminds to mention the ads I saw on page A11 and A13 in yesterdays paper by a group called Nuclear Matters, a “de facto nuclear industry front group” trying to create a false impression that environmentalists were warming to nuclear power" because they play a "vital role in clean-energy and carbon-reduction goals while providing critical tax revenue for roads, schools and other public priorities."
If they fail, of course, the taxpayer picks up the costs.