CU Foundation Announces Changes In Portfolio Management
DENVER—After five years of internal management of its investment portfolio—which includes the University of Colorado endowment—the University of Colorado Foundation is outsourcing these services to Perella Weinberg Partners (PWP), an asset management firm based in New York.
CU Foundation leadership and board members reviewed the services, performance and pricing of several firms that manage university portfolios before entering into negotiations with PWP in recent months.
This new relationship enables the Foundation to increase due diligence and monitoring resources, keep management costs favorable, and retain the investment expertise of Chris Bittman, under whose leadership the portfolio has significantly outperformed the broad equity markets and peers since he joined the Foundation as chief investment officer in 2004.
Bittman (a 1985 alumnus of CU-Boulder) transitions from Foundation staff to a new role as partner and chief investment officer at PWP’s Agility Funds asset management group. In this capacity, he will also be chief investment manager of the CU Foundation Long Term Investment Pool (LTIP)—which includes the CU endowment. As of June 30, 2009, the LTIP was valued at $715.8 million and the CU Endowment, a subset of the LTIP, was valued at $590.1 million.
“Chris Bittman has been a loyal and dedicated investment leader at the Foundation, and his balance of investment expertise and personal relationships is essential to our constituent-focused model,” says Foundation President and CEO Wayne Hutchens. “This arrangement is a real win for the people, places, and programs that benefit from the strong performance of the CU Endowment.”
Fundamental aspects of the CU Foundation’s portfolio management remain unchanged. Its asset allocation guidelines will continue to be set by the Foundation’s Investment Policy Committee, and its portfolio strategy and legacy holdings will largely remain intact. The Foundation’s Board of Directors will maintain fiduciary responsibility for the endowment, with Foundation Chief Financial Officer Rick Lawrence responsible for day-to-day interface with PWP.
Under Bittman’s direction, the Foundation’s portfolio is up 28 percent cumulatively since September 30, 2004, during which time the S&P 500 has dropped 11 percent. It has beaten the broad equity markets and Foundation-specific benchmarks in each of the past five years, outperforming 94 percent of its peers.
But as the investment landscape has grown increasingly complex, the Foundation saw the need for a sustainable, cost-effective long-term investment model. After three years of consideration of various models and approaches, the new partnership offers an optimal combination of strengths for the Foundation’s investment trajectory. These include:
- Improved risk management: With access to a team of 15 PWP portfolio managers (as of June, the Foundation had two), Bittman and his team can vet a broader pool of investment opportunities.
- Investment performance: By maintaining Bittman’s attention to the Foundation’s portfolio and dramatically expanding access to PWP resources and staff, the Foundation will have opportunity for continued strong returns.
- Cost structure: The Foundation has secured a pricing commitment that is lower than the current in-house investment model and is expected to remain so in the years to come, with no reduction of investment-management capabilities.
- Governance: Bittman and his team at PWP will manage the investment portfolio according to the written asset allocation guidelines, strategic direction, and investment policies of the Foundation’s Investment Policy Committee.
Founded in 1967, the nonprofit CU Foundation partners with the University of Colorado to raise, manage, and invest private support for the university’s benefit. Our donors help the university transform lives through education, research, clinical care, and community engagement. Visit www.cufund.org for more information.