On Oct. 5, you printed a page 1 article on Long-Term Capital Management LP in which St. John's University was mentioned. Information that was published about St. John's investment in Long-Term Capital was not fact-checked with the university and was incorrect.
The university has a policy of not discussing publicly the details of its investment strategies and activities. However, within the guidelines of that policy, we feel it important to correct the story record and thereby avoid such inaccuracies in any future articles on this subject.
St. John's had an investment in Long-Term Capital. We withdrew our original investment, plus profit, achieving a reasonable return. We continue to have a small investment, albeit immaterial, of less than 5% of our total portfolio.
*The figure of 15% is wrong. In fact, our investment policy limits to only 10% the amount of our overall investment portfolio which may be allocated to such alternative investments as Long-Term Capital.
*Second, endowment does not = total investment portfolio. The investment dollars allocated to Long-Term Capital reflect funds derived from the entire pool of university dollars available for investment. This pool includes but is not limited to endowment dollars. Someone reading the article would believe that our endowment fund, traditionally made up of our donations and gifts, is somehow targeted for this type of alternative investment which has greater risk than more traditional investment options. For your information, our endowment funds now total in excess of $90 million.
*Lastly, the statement allows the reader to believe that these figures represent St. John's investment at the time of Long-Term Capital's decline - or, St. John's loss. As indicated earlier, the university made money on this investment.
I believe a correction is in order. Thank you for your consideration.
Director, news and information
Office of External Affairs
St. John's University
Editor's note: The Pensions & Investments reporter who wrote the story made several attempts to reach St. John's University endowment officials for comment. As stated in the story, none of them returned the phone calls.
No bundled services
I would like to make some modifications to the Nov. 2 Consultants Directory item for Evaluation Associates on page 28.
In addition to our defined benefit consulting services, EAI also provides advice and guidance on all aspects of 401(k) plan management, including the selection of record keepers, evaluation of communication/education programs, analysis of investment managers and the structure of the investment lineup, and ongoing performance evaluation and monitoring. EAI also offers plan benchmarking studies and cost analysis.
The firm has one team dedicated to 401(k) plans, and three other teams with significant defined contribution experience.
We do not provide bundled services, which was referred to in the item. To find out more about EAI, just call us at (203) 855-2200 or visit our Web site at www.eval-assoc.com.
Dawn N. Ussery
Social investing success
The lead story in your special report on hospital finance regarding Catholic Healthcare West's socially responsible investment success (Sept. 21, page 19) demonstrates what Fox Asset Management has been able to accomplish for our clients for many years - excellent consistent returns while being socially responsible.
The myth that has prevailed over the years is that one must sacrifice return to be ethical. As noted in your article, the Catholic Healthcare West experience debunks this myth.
We implement the same value-oriented philosophy and discipline for all accounts while being conscientious about each social restriction.
Although over 16% of our current portfolios are socially conscious, we can report that these accounts have not lagged our equity composite returns, but rather have outperformed them by 0.33% annually through the second quarter of 1998. In fact, an even greater gap on the upside existed for those socially responsible accounts that have been with us for periods greater than three years.
It is a pleasure to be part of the success of socially responsible clients such as Catholic Healthcare West. We applaud the Pensions & Investments' article exploring this issue, and Sister Susan Vickers and other socially responsible investors for their willingness to invest in their beliefs.
Dorann J. Cafaro
Senior Vice President
Fox Asset Management Inc.
Little Silver, N.J.