Friday, May 21, 2010

"Egregious" Conflict of Interest

Dartmouth's investment policies are questionable at best, and now BusinessWeek has picked up on it with a story on elite colleges' role in fomenting the speculation excesses of the Naughty Aughties (the 2000's).

The key quote:

“Dartmouth provides the most egregious example of conflicts,” said Joshua Humphreys, lead author of the report and founding director of the Center for Social Philanthropy at Tellus, on a conference call. He lectures at Harvard. “Can you imagine the investment committee meetings at Dartmouth? Basically half the room has to leave including the chairman of the investment committee.”

Humphreys is referring to the Trustees' practice of investing the College's endowment money in funds that are managed by Board members themselves - not a bad helping hand to those funds! Examples cited by the article included:

$40 million to Leon Black's Apollo Global Mangagement
$10 million to Steve Mandel's Lone Pine Capital
$10 million to William Helman's Greylock Partners

8 comments:

Jeff B said...

The word "egregious" always piques my interest...but rarely my "conflict of interest". walla walla follower

Anonymous said...

Did Humphries mention that he “participated as an expert acting on behalf of SEIU in a discussion" between Dartmouth and SEIU Local 560 "related to the budget issues," according to Roland Adams for Dartmouth?

Joshua Humphreys said...

"Anonymous":

Yes, I did, actually. It's called fact-finding, and it's what principal investigators do.

Argumentum ad hominem doesn't respond to the data we analyze. I would encourage you and others to read the report and draw your own conclusions about the management and oversight of the Dartmouth endowment -- and its impact on campus operations and the Upper Valley's economy:

http://www.tellus.org/publications/files/endowmentcrisis.pdf

Joshua Humphreys
Tellus Institute
11 Arlington Street
Boston, MA 02116

Anonymous said...

Yo! Ta hell with da Dartmouth Invessmentalogical Committee.Give da dough to da union thugs at SEIU and have dem manage it. Dey can put it out "on da street".Dey will get betta retoins. "Yo! Buddy! We is from Dartmouth. We'll give you 5 now for 6 on payday." We'll have da football team act as collectors. Tink dat da teamsters Central States Pension Fund was fun to watch when dey was in action? Nuttin compared to da opportunities here.Every alum dat contributes a hunnerd large to da Fund gets a pinky ring poisonally engraved by Pres Kim.

Anonymous said...

Mr Humphries:

I haven't read it yet. Could you cite the page on which you disclose your work on behalf of Local 560? I don't see the phrase "fact-finding" anywhere in the report.

Anonymous said...

Read the report. It is troubling.

The endowment would have been better off invested in a passbook savings account at Ledyard National Bank. Really.

The Campaign for the Dartmouth Experience might as well have never happened.

I can't remember a worse week of news for Dartmouth. The old place has lost its way. When I was there it was right up with Princeton, and now it is the least desirable Ivy by far.

Anonymous said...

"The endowment would have been better off invested in a passbook savings account at Ledyard National Bank."

Are you sure? With only the first $100k insured?

Even so, no reasonable person would have suggested that years ago, before this all started. It's as if these Tellus people aren't aware that all investments carry risks. To disagree - in hindsight - about whether the trustees should have taken your advice back then doesn't seem to me to be saying much.

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