Several employees of Stanford Management Co., the investment arm of the $21.4 billion university endowment, are leaving as CEO Robert Wallace continues work on a new investment strategy, confirmed university spokesman Brad Hayward on Thursday.
Mr. Wallace joined Palo Alto, Calif.-based Stanford in late March and since then, “has been working on an investment strategy that places different demands on the organization,” said Mr. Hayward in an e-mailed statement.
One source familiar with operations of the endowment said among those who will be leaving in the next few months is Karen Horn Welch, director of portfolio strategy for the endowment, the fourth largest in the U.S.
The source said that up to nine people will be leaving the endowment. After that, only five of the 25 investment staffers who were in place when Mr. Wallace replaced CEO John Powers in March will remain.
“While the university and the Stanford Management Co. do not speak in detail to internal personnel matters, it is not unusual for staff changes to occur following a transition in leadership in an investment organization,” Mr. Hayward said in the statement.
Mr. Hayward also said in the e-mail that he could provide no further detail on the personnel changes or discuss the change in investment strategy.
Mr. Wallace was hired with a mandate to improve investment results for the endowment, said the source.
Stanford's endowment had a 14.8% return in the fiscal year ended June 30, 2014, compared with a 16.5% average for endowments with more than $1 billion in assets tracked for the NACUBO-Commonfund Study of Endowments.
The results for the latest fiscal year won't be released until September.
The university endowment has a very high exposure to hedge funds and private equity, with about 55% of its portfolio devoted to those asset classes.