At Fordham University, CIO Geeta Kapadia is overseeing its $1 billion endowment to achieve long-term growth.
With the ability to “hold things for a long time,” the endowment is willing to lock up its capital and take the liquidity risk, she told a panel of allocators at the SALT iConnections New York 2024 conference on May 21.
But given that it has to support the Jesuit university’s ongoing operating expenses, it does have to generate some income, so “we have to make sure that we can leave that, regardless of whether the markets are up or down,” Kapadia added.
Prior to joining the New York-based higher education institution in 2022, she managed $5 billion in pension assets as the associate treasurer of investments at the Yale New Haven Health System in Connecticut.
The nonprofit healthcare system isn’t a part of Yale University, where 35-year CIO David Swensen, who died in 2021, had established the endowment model heavily reliant on alternative investments and popularized among Ivy League schools. But Kapadia described her former employer as Yale’s “very close neighbor.”
Similarly, comparing the Yale model with Fordham’s model, “we probably are more like it than not like it, but we do have to recognize that we have our own set of particular characteristics that we need to really prioritize,” she said, not going into data on Fordham’s asset allocation or asset class returns.
“Although we think of ourselves in sort of along the lines of (Yale’s) endowment model, there’s no way we can re-create their endowment model,” she added. “We don’t have that kind of access that Yale and Columbia do. We don’t have the ability to have the first-mover advantage that they do, but we can use some of the tools that they have put in place … to try and adapt to our specific situation.”
The endowment is obligated to match the Jesuit university’s annual spending rate of 4.5%.
“It’s the same idea of litigating pension liability,” she said. But “unlike a pension plan that can close,” her team does not “want to close the university,” where 17,000 students attend class.
Speaking of students, she said they’re one of the university’s resources for promoting inclusive capital.
Fordham received a $50 million grant from the Environmental Protection Agency’s Environmental Justice Thriving Communities Grantmaking program in December 2023. The money allows the university to give community organizations federal funds for environmental projects and workforce programs, such as jobs related to reducing greenhouse emissions or improving air quality.
While Kapadia noted that Fordham isn’t the only higher education institution that allows its students to invest in the university's endowment, she said she wants her university’s students to “put their money where their mouth is.”
For the Fordham University Student Managed Investment Fund, the endowment “just approved $1 million for students to run an environmental, social and governance fund. We hope they will take climate into consideration — I would be surprised if they didn’t — as they start to deploy assets in that fund,” Kapadia added.
