Black school endowments push for growth, diversity
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • Digital Alpha raises more than $1 billion for infrastructure fund
      A healthcare worker provides care for a COVID-19 patient in the intensive care unit at the Saint Joseph hospital in Marseille, France, on Nov. 20, 2020.
      Private equity’s health-care role draws spotlight
      John Haggerty
      Sector’s risks need to be weighed, consultant says
      Some alternative strategies struggle in first quarter following tough 2020
    • Daniel Celeghin
      Indefi hires New York-based managing partner
      Hub International continues buying spree with IBG acquisition
      Callan brings on 2 executives
      Hub International agrees to buy Plan Sponsor Consultants
    • American flags outside the New York Stock Exchange
      Stock shorts collapse as no hedge fund wants ‘head ripped off’
      Michelle Dunstan
      Move to link exec pay to ESG integration growing
      The J.P. Morgan Chase logo displayed at a branch bank
      J.P. Morgan sells $13 billion of bonds in largest-ever bank deal
      John Bakarat
      Commentary: COVID-19 and real estate debt – where investors should be looking
    • Pentegra joins with EPIC to offer 3(16) fiduciary services
      Joseph Healy
      Smaller DC plans place greater focus on improving financial wellness efforts
      Interest rises in keeping retiree assets in-plan
      Pentegra launches pooled employer plan
    • U.S. likely to join Europe in mandating climate risk disclosure – John Kerry
      Environment Agency fund pledges to reduce carbon emissions by half by 2030
      MSCI urges capital markets players to act on net-zero ambitions
      Michelle Dunstan
      Move to link exec pay to ESG integration growing
    • Joel Holsinger
      Ares wants to do good – and profit – with fund
      Girls Who Invest
      MetLife plans 3 internships for Girls Who Invest scholars
      Model home
      Resmark sees niche in buying, leasing model homes
      Riscura stories
      Dystopian tales explore altered retirement reality
    • Karen Karniol-Tambour
      Bridgewater appoints 2 co-CIOs to oversee new sustainable investing group
      Hedge funds post best first-quarter return since 2000
      Jason Kephart
      Managers see good times ahead in 2021
      Jev Mehmet, CEO of Brevan Howard's Coremont unit
      Brevan Howard runs $50 billion unit like BlackRock’s Aladdin
    • The headquarters of the California Public Employees' Retirement System, Sacramento
      CalPERS board votes to add long-term comp for CIO post
      High-yield spreads narrow, default rates drop
      U.S. likely to join Europe in mandating climate risk disclosure – John Kerry
      Environment Agency fund pledges to reduce carbon emissions by half by 2030
    • Jake Cabala
      Patient Square Capital adds head of fund partnerships
      Carrie Peluso
      SSGA promotes executive to head of global manager research
      Invesco logo shown on the floor of the New York Stock Exchange
      watch video
      1:28
      Invesco’s bid for performance gains
      Ameriprise, Amundi add to their European rosters
    • The headquarters of the California Public Employees' Retirement System, Sacramento
      CalPERS board votes to add long-term comp for CIO post
      Ventura County Employees adjusts target allocations after asset-liability study
      PennPSERS boosts employee contribution rates after reporting error
      Melrose Industries to plug U.K. pension deficit by selling assets
    • David Greenberg
      The California Endowment finds internal candidate as next CIO
      Daniel Celeghin
      Indefi hires New York-based managing partner
      Carrie Peluso
      SSGA promotes executive to head of global manager research
      Cohen & Steers adds team for new private real estate business
    • European private equity deal value, volume hit records for first quarter
      Paul Morrissey
      Blackstone Growth picks managing director to lead European investing
      Bills of euro, dollar and pound currencies, among others
      Ardian closes latest buyout fund at $8.8 billion
      Hand typing on stationary iPhone at an office reception desk
      Private equity’s taste for tech spurs $80 billion deal spree
    • BentallGreenOak closes latest European fund at $2.3 billion
      Cohen & Steers adds team for new private real estate business
      Australia’s Centuria makes takeover bid for Primewest
      CalSTRS indutrial property
      Investors hungry for industrial properties
    • Andy Schreiner
      New PEPs targeting firms without retirement plans
      Jackie Walorski
      Contribution catch-up for caregivers gaining favor
      Neal and Brady
      Retirement security could be only issue both sides accept
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
    • A coin representing Bitcoin cryptocurrency in the U.K.
      Cryptocurrency and digital assets
      Corporate pension contributions
      Eddy Awards 2021
      COVID-19: One year in
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • New York State Common slates $400 million for renewable energy
      Texas County commits $100 million to another Taconic credit fund
      GPIF prepares to make first direct alternatives allocations
      Ohio State Teachers calls on Hellman & Friedman buyout fund
    • New York State Common slates $400 million for renewable energy
      Texas County commits $100 million to another Taconic credit fund
      GPIF prepares to make first direct alternatives allocations
      Ohio State Teachers calls on Hellman & Friedman buyout fund
    • Emerging Market Debt Manager Services
      Real Assets Consultant
      Passive Investment Management Services
      Active Extended Global Credit Manager Search
    • High-yield spreads narrow, default rates drop
      Private real estate funds continue rebound
      Managed account adoption stalls in 2020
      U.S. bonds have worst quarterly return since 1981
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Marcie Frost
      CalPERS: Urgency underscores all areas of providing retirement security
      BPTW cartoon
      P&I’s Best Places to Work marking a milestone
      CalPERS cartoon
      Urgency underscores CalPERS' search for a CIO
      Multiemployer plans cartoon
      Money — but no fixes — for multiemployer plans
    • Bipsync Client Stories: RMS in Action at Pensions and Superannuation Funds
      COVID-19 Makes LP Portfolio Management More Important Than Ever
      China: the outlook is bright for longer-term investors
      Finding Differentiation in Securitized Assets
    • John Bakarat
      Commentary: COVID-19 and real estate debt – where investors should be looking
      Jake Remley
      Commentary: Inflation expectations vs. reality in the bond market
      Greg Shea and Steven Kindred
      Commentary: The solution for yield-seeking allocators may be hiding in plain sight
      Jim Park
      Commentary: Asian Americans, Pacific Islanders face ‘bamboo ceiling’ in money management
    • Marcie Frost
      CalPERS: Urgency underscores all areas of providing retirement security
      Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
    • P&I Content Solutions
      Research for Institutional Money Management
      P&I Content Solutions
      Top questions for institutional investors
      Sponsored Content By Newton Investment Management
      Growth and Innovation in Emerging Markets
      P&I Content Solutions
      Fixed income 2021
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • Invesco logo shown on the floor of the New York Stock Exchange
      watch video
      1:28
      Invesco’s bid for performance gains
      watch video
      1:23
      The passive fixed-income glut
      watch video
      1:38
      Is it time for DC plans to embrace private equity?
      watch video
      5:39
      The coronavirus pandemic: One year later
    • New Outlook on Income: A Framework for Evaluating DC Retirement Income Solutions
      Investing in infrastructure at the right price
      Time for Action: Shifting Pension Dynamics from a Macro and Regulatory Relief Perspective
      Understanding the PEP Evolution
    • POLL: Cryptocurrency investing
      POLL: The Biden infrastructure plan
      POLL: Retirement income solutions
      POLL: Working after the pandemic
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • High-yield spreads narrow, default rates drop
      By the Numbers for April 2021
      Graphic: Invesco’s bid for performance gains
  • Events
    • Conferences
    • Webinars
    • DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
      Retirement Income Conference
    • New Outlook on Income: A Framework for Evaluating DC Retirement Income Solutions
      Investing in infrastructure at the right price
      Time for Action: Shifting Pension Dynamics from a Macro and Regulatory Relief Perspective
      Understanding the PEP Evolution
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. Endowments
February 04, 2019 12:00 AM

Black school endowments push for growth, diversity

HBCUs seeking broad range of managers to help them boost assets

Danielle Walker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    James Kegley
    David A. Thomas has a goal to boost the assets of Morehouse College's endowment to $400 million.

    As institutions and investment consultants increasingly look for opportunities to pinpoint and work with diverse asset managers, a segment of investors overseeing endowments for historically black colleges and universities also is in the market, either as a matter of formal policy or informally, setting diverse manager searches and hires as a priority for staff.

    Officials at HBCUs are simultaneously ramping up their capital-raising efforts to grow their endowments, sources said.

    Keon Holmes, a managing director at investment consultant Cambridge Associates LLC, Boston, has found that "a number of (HBCUs) are making growth of their endowments a priority and are investing in their development offices in order to raise dollars within and outside their alumni networks," he said an email.

    These institutions also have shown an interest in working with minority-owned asset managers, Mr. Holmes noted.

    "A subset of HBCUs have incorporated language into their investment policy statements indicating a desire to unearth and hire minority managers. Other institutions may not have formalized this as a written policy but have stated this as an implementation priority," he continued, adding this increased interest in diverse managers has surfaced across Cambridge's larger client base.

    Among 101 HBCUs in the U.S. Department of Education's Integrated Postsecondary Education Data System, 48 schools submitted data on their endowment assets, which, combined, totaled $2.7 billion as of the end of fiscal year 2017. The largest endowment on the list belonged to Howard University, Washington, which at the time had $647 million (the endowment was $688 million as of June 30).

    According to recent government data, HBCU endowments are a little more than half the size of median endowments at similar schools that are non-HBCUs.

    After matching accredited HBCUs with non-HBCUs across key areas that include sector type (public, private, two- or four-year institutions), highest degree offered, enrollment size and location, the U.S. Government Accountability Office found the median endowment at HBCUs was $12 million, while the median endowment size at non-HBCUs was $23 million, according to a June report. GAO analyzed Department of Education data on the endowments of 83 HBCUs and 286 non-HBCUs to find the median endowment sizes.

    The report, which examined HBCU's capital project needs and funding sources, ultimately recommended the Department of Education increase outreach to institutions to inform them of its HBCU Capital Financing Program, which was created in 1992 and provides grants that can be used for a number of purposes, including endowment-building, financial management, academic resources and physical infrastructure.

    "Officials we spoke with noted that HBCUs do have smaller endowments, so many have challenges accessing financing," said Boston-based Melissa Emrey-Arras, a key contributor to the report and director of education issues on GAO's education, workforce and income security team, in a phone interview.

    "What you see from (the report) is that HBCUs had about half of the total endowment (assets) of matched non-HBCUs," she continued.

    First goal

    At Morehouse College, Atlanta, where the school's endowment well exceeds the median $12 million figure for HBCU endowments cited in the GAO report, one of the first goals set by new President David A. Thomas was to increase the school's endowment.

    When Mr. Thomas took office in January 2018, the endowment was approximately $140 million, but he aims to grow the endowment to $400 million under a capital campaign, which is still being developed,a spokeswoman wrote in an email.

    The endowment at Morehouse, a historically black, private liberal arts college for men founded in 1867, stood at $145 million as of June 30, the spokeswoman confirmed. Mr. Thomas also set a goal to double Morehouse's alumni giving rate to 34%, a goal the school's office of institutional advancement is working toward.

    In the fall, Mr. Thomas hired Monique Dozier as vice president of the office of institutional advancement "to revamp fundraising strategies at Morehouse, increase overall giving and lay the foundation for a capital campaign," the spokeswoman wrote. Ms. Dozier was previously an assistant vice president for advancement information systems and donor strategy at Michigan State University.

    The school's capital campaign would seek to raise money for student scholarships and other college needs, including endowment growth, the spokeswoman confirmed in a follow-up call.

    For the endowment, net annualized returns for the trailing one-, three- and five-year periods as of June 30 were respectively 2.6%, 6.4% and 13.3%, according the spokeswoman.

    Last month, Vista Equity Partners Management LLC Founder and CEO Robert Smith made a $1.5 million gift to fund endowed scholarships and the design and creation of a park that will serve as an outdoor study area for students, a news release from Morehouse said.

    Minority-owned Vista Equity Partners is an Austin, Texas-based private equity and venture capital firm.

    Collaborative management

    At Spelman College, a private liberal arts women's college in Atlanta, the endowment has reached nearly $390 million, "over several decades," President Mary Schmidt Campbell said in a phone interview.

    Cambridge Associates serves as the endowment's investment consultant, but Spelman also has an in-house endowment team headed by Robert "Danny" Flanigan Jr., who is the chief financial officer, vice president for business and financial affairs, and treasurer for Spelman College, Ms. Campbell said.

    "(The endowment is) run by Danny. It is a collaborative conversation about where Spelman should put its money," she added.

    In a follow-up email, Mr. Flanigan provided information on Spelman's asset allocation: 37.4% private equity/venture capital/distressed investments, 23.2% marketable alternatives, 13.7% global non-U.S. equities, 10.5% U.S. equities, 6.6% fixed income, 5.1% real assets and 3.5% cash.

    While Spelman is "always in constant search of new investment managers," it currently has a roster of 51 external investment managers.

    Nearly 18% of the Spelman endowment's net asset value was invested with diverse managers as of June 30. Mr. Flanigan added, however, that "Spelman hires managers based on performance — not because they are minorities."

    The Spelman endowment's one-year net returns were 11.68% as of June 30, while its annualized three-year and 20-year returns were 7.55% and 8.75%, respectively, according to data provided by a spokeswoman.

    Minority managers

    Howard University has approximately 50 money managers on its roster. Of note, its investment office seeks to identify minority-owned money managers "with the pedigree and capabilities to meet (its investment goals) in alignment with fund objectives," a university spokeswoman wrote in an email.

    "Howard believes that minority managers can add value to the program and will continue to seek such managers in the investment process," the spokeswoman said.

    As of Dec. 31, minority firms managed 10% of Howard's endowment assets, the university later confirmed.

    Howard's endowment separately has increased its real estate target allocation over the past few years to 10% from 5%, while private credit was added as a new asset class (up to 9%). The university remains interested in these asset classes as well as real assets and infrastructure funds, the spokeswoman added. In May 2016, Frank Bello was appointed chief investment officer of the Howard endowment fund, which was previously overseen by Patricia Gerrick, who worked in a "contractor CIO" role, and not as an employee of Howard, according to the spokeswoman. Prior to taking on his role, Mr. Bello was treasurer and trustee of the Chicago Transit Authority.

    Additionally, Howard in February 2018 hired a director of investments, Brian Swain, to assist Mr. Bello in managing the portfolio, according to the spokeswoman.

    The Howard endowment's net returns over the one-, three- and five-year periods were 8.8%, 6.3%, 7.1%, respectively, according to data provided by Mr. Bello.

    Related Articles
    More fund execs look at ESG investing as logical extension of their missions
    Institutions increase ESG focus in 2018
    Women- and minority-owned firms hold tiny slice of money management industry
    Recommended for You
    University of Kentucky extends consultant's contract
    University of Kentucky extends consultant's contract
    University of Virginia endowment posts 5.8% for fiscal year
    University of Virginia endowment posts 5.8% for fiscal year
    Ohio State University's 1.2% return for fiscal year falls short of benchmark
    Ohio State University's 1.2% return for fiscal year falls short of benchmark
    In Challenging Markets, Systematic Global Macro Strategies Could Hold Opportunity
    Sponsored Content: In Challenging Markets, Systematic Global Macro Strategies Could Hold Opportunity
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Bipsync Client Stories: RMS in Action at Pensions and Superannuation Funds
    COVID-19 Makes LP Portfolio Management More Important Than Ever
    China: the outlook is bright for longer-term investors
    Finding Differentiation in Securitized Assets
    Green and sustainable bonds in emerging markets
    Portfolio Protection: One Size Fits None
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    April 5, 2021 Page One

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center