The Singapore University of Technology and Design, launched by the city-state's government in collaboration with the Massachusetts Institute of Technology last year, is moving quickly to build what remains a rarity in Asia — an endowment fund capable of providing material support for the school's growth and development.
Late last year, SUTD tapped Internet job sites such as Monster.com to find a chief investment officer for its newly minted endowment fund. In January, meanwhile — years before SUTD's first graduating class — the school hired Yvonne Ho, the number two executive in rival Singapore Management University's office of advancement and alumni, to lead its own endowment donations effort.
SUTD's effort, to both source donations for its endowment and invest those funds for the long term, is occurring in an environment in Asia where governments continue to supply the bulk of university funding, making endowments “a bit of an afterthought,” noted Mark Wills, a Sydney-based managing director with State Street Global Advisors' institutional solutions group for the Asia-Pacific region.
Cultural factors as well as a lack of supportive tax treatment for donations have left the biggest endowments in Australia ranging between US$1 billion and US$1.5 billion, and endowments in other relatively developed parts of the region, such as South Korea and Taiwan, at a fraction of those levels, said Mr. Wills.
Meanwhile, in stark contrast to their U.S. counterparts, who led the push into alternative and illiquid asset classes in recent decades, managers of permanent endowment and foundation funds at universities in the Asia-Pacific region more often than not opt to invest very conservatively.
Universities in Japan, for example, don't segregate their permanent funds from the university's accounts, contributing to a focus on fiscal year results that inhibits risk taking, noted Masafumi Hikima, a professor with Sophia University, who serves as investment adviser on the Tokyo-based school's bureau of financial affairs.