Dickinson Discusses Investment Strategies
The endowments of Dickinson, Smith, Middlebury and Barnard colleges; the University of Tulsa; and a select group of foundations are all managed by Alice Handy, founder and president of investment management company Investure, according to Dickinson College Vice President and Treasurer Annette Parker ’73.
Dickinson has approximately the same number of students and the same fees as some of these other institutions and the larger set of peers––such as Swarthmore, Bryn Mawr and Carleton––against whom we benchmark investment returns, Parker said, but its endowment is much smaller. Dickinson's portfolio has become extensively more complex since President William G. Durden's ’71 arrival in 1999, and on May 6, 2006, the college hired Investure and became part of a consortium of eight colleges and foundations. This consortium allows Dickinson's investment committee to save money on fees, to share ideas with the other institutions and to access investments which require larger initial commitments than Dickinson could fund on its own.
Dickinson’s investment over the past seven years––most recently, the college’s work with Handy through Investure––has allowed it to optimize returns and interact with institutions with endowments much larger than our own.
“It really makes Dickinson stand out in the way that we've handled our endowment,” Parker said.
Dickinson's endowment, now at approximately 336 million dollars, has more than doubled since 2003, Parker said. Parker attributes this to the strong giving in the Capital Campaign, and investment returns that have outpaced the market and the returns of other endowments.
For Parker, “the endowment is significantly intertwined with institutional advantage: that is our future.”
Just under nine million dollars from returns on the endowment are used annually to fund scholarships, faculty chairs, library resources and countless other projects that go on at Dickinson.
Last week, Dickinson's Investment Committee of the Board of Trustees, a volunteer group made up of alumni described by Parker as “highly placed professionals in the investment world,” had a meeting with Handy and her team. The evening following the meeting, Parker indicated, Dickinson and Smith "joined forces" to discuss investment strategies and to hear speeches from distinguished guests Founder, Portfolio Manager and CEO of Glenview Capital Management Larry Robbins, and Chief Investment Strategist for Pequot Capital ByronWien.
Dickinson uses its new “peer” group to build its network of accomplishment in other ways as well.
Regional Development Officer Robert Beckelheimer ’82 organized a collaborative networking event in June, which allowed about forty alumni each from Dickinson, Barnard, Middlebury and Smith to discuss the investment world and some of the main points of Handy’s strategy.
This allowed alumni who are working in finance to network with each other and with others in their field. “We have to find more creative ways…to give our alumni and our current students opportunities so that they can advance their careers,” Beckelheimer stated. This, he said, is because Dickinson lacks the large alumni base that other institutions enjoy, especially on Wall Street.
Shortly after Durden’s arrival at the college, when administrators were putting a new financial plan into place, their goal was for the endowment to reach the 300 million dollar mark by 2010. They developed a multi-pronged strategy, including bringing the discount rate into an appropriate range to support both access and funding for operations; and developing a more sophisticated approach to investing. On May 6, 2006, Dickinson reached a new level of investment strategy when it hired Handy.
Dickinson spends about five percent of the endowment’s average market value over 12 quarters, while simultaneously aiming to earn more than the nine percent return required to fund spending and keep up with inflation.
At the end of the 2007 fiscal year, on June 30, 2007, the college’s total endowment had already surpassed its goal for 2010 with a market value of 330 million dollars.
A revised goal, Parker said, is to reach 400 million dollars by 2010. “Dr. Durden’s always talking about taking the college to the next level,” Parker noted. “That’s what we’ve done with the investments.”
Meetings with Handy and with representatives of institutions like Smith are examples of Dickinson’s concrete actions to improve upon investments and the endowment. Parker said, “We're gutsy, we're catching up, but we've got a lot of work to do.”