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Barnard Endowment Switches Manager to Help It Avoid Climate Deniers

Updated on
  • Barnard replaces Alice Handy’s Investure as fund manager
  • Strategic Investment Group is hired to manage school fund

Barnard College is replacing its money manager, Investure LLC, with another firm that will help the $286 million endowment divest from fossil fuel companies that thwart efforts to address the impact of climate change.

Strategic Investment Group, based in Arlington, Virginia, will become the fund’s manager at the end of September, Barnard said Wednesday in a statement. Investure, run by Alice Handy in Charlottesville, Virginia, had overseen the school’s investment office since 2006. Barnard is at least the third client to depart Investure in the past three years.

In March, Barnard’s board of trustees voted to divest from energy companies that deny climate change, saying the women’s college, which is affiliated with Columbia University in New York, will “distinguish between companies based on their behavior and willingness to transition to a cleaner economy.”

Investment Options

Clients have said that Investure’s business model doesn’t allow customers, whose money is pooled, to exclude certain investments. Robert Goldberg, Barnard’s chief operating officer, said Wednesday in an interview that the change was made because “we felt that we needed more flexibility, especially in light of where we’re heading with fossil fuels.”

Handy didn’t return a call or email seeking comment. In the statement, the school thanked Investure for “its strong relationship with Barnard College.”

“Strategic has a proven track record of managing endowments and has achieved strong returns,” Barnard said in the statement. “The firm has the desired ability to tailor investments to meet Barnard’s specific needs.”

Barnard joins Rockefeller Brothers Fund and The Commonwealth Fund in parting ways with Handy, whose success has helped ignite an industry of outside investing firms for university endowments and foundations. With the loss of Barnard, Investure will have 12 clients, according to its website.

Fossil Fuels

The Commonwealth Fund, a private foundation in New York with an endowment of $711 million as of June 2016, sought a new investment office after deciding to purge tobacco stocks from its portfolio, according to a person familiar with the matter. It replaced Investure with a unit of Perella Weinberg Partners in January, according to the person.

In 2014, Investure lost Rockefeller Brothers Fund, which decided to divest from fossil fuel companies. Rockefeller Brothers, which has an $816 million fund, hired the Perella Weinberg unit that customizes portfolios.

The Commonwealth Fund and Rockefeller Brothers Fund still have some private equity investments with Investure, the person said.

Barnard’s Goldberg said in a March interview that the endowment had about $18 million of investments in fossil fuel companies, including private equity partnerships entered into through Investure. Divestment will take time because the only way to unwind the partnerships is to sell and “we don’t want to sell at a discount,” he said.

Track Record

Handy has an impressive track record on performance but stumbled in fiscal 2016. Investure posted losses as steep as 5.9 percent for university clients in the year through June 30, 2016, far below the average 2 percent loss for endowments.

Barnard’s endowment was valued at $286 million in fiscal 2016 and had an investment decline of 4.5 percent. Investment performance for fiscal 2017 hasn’t been released.

Trinity College’s endowment, managed by Investure, posted a 13.3 percent investment return in fiscal 2017, bringing the five-year annualized gain to 8.9 percent, according to a report posted on the school’s website. As of June 30, 2016, the fund’s value was $532 million. Kathy Andrews, a school spokeswoman, said the updated value won’t be finalized until next month.

Trinity’s fiscal 2017 performance was fueled by global equities, which gained 19.8 percent, while hedge fund and private-equity holdings produced “double-digit” returns, according to the report.

Reviewing Performance

Dickinson College, another client, said its review of Investure’s performance is set to be completed in October, spokeswoman Christine Baksi said Wednesday. Dickinson’s fiscal 2017 returns will be reported next month. The liberal arts college in Pennsylvania lost 4.4 percent in fiscal 2016.

“We’re very excited to have this fiduciary relationship with Barnard College,” Brian Murdock, chief executive officer of Strategic Investment, said in a phone interview. “They are exceptionally sophisticated investors and we anticipate a strong working partnership for years to come.”

— With assistance by Kate Smith

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