Home > News > Asset Management Culture > Tesla Recruits Former CIO of $1.5 Trillion Japanese Pension Fund GPIF
Asset Management Culture

Tesla Recruits Former CIO of $1.5 Trillion Japanese Pension Fund GPIF

Hiromichi Mizuno joins Tesla to serve the board as an independent director and on its audit committee.
By Steffan Navedo-Perez

Tesla has recruited Hiromichi Mizuno, former chief investment officer of the $1.5 trillion Japanese Government Pension Investment Fund (GPIF), to serve as an independent director on its board and join the board’s audit committee.

Mizuno served as GPIF’s CIO from January 2015 until March of this year, after having had his contract extended by six months past its initial expiration date set in October 2015. He was recently replaced by Goldman Sachs veteran Eiji Ueda, who is contracted to serve for two years.

“[At GPIF], Hiro emphasized the importance of environmental considerations in portfolio management and became a global though leader in sustainable and responsible investment practices,” Tesla said in a statement regarding Mizuno’s recruitment. “He also challenged many established market practices, including short-selling, to promote long-term value by corporations.”

Tesla CEO Elon Musk recently offered public praise for Mizuno and his team after they announced their decision to suspend the firm’s stock lending program, which is used to facilitate short selling programs.

For more stories like this, sign up for the CIO Alert newsletter.

“The stock lending scheme lacks transparency in terms of who is the ultimate borrower and for what purpose they are borrowing the stock,” GPIF said in its December announcement of the suspension. 

The fund cited concerns over whether the short selling industry is hurting the companies they are trying to benefit, which would be “considered inconsistent with the fulfillment of the stewardship responsibilities of a long-term investor,” the fund said.

Musk replied to GPIF’s announcement two days later on Twitter saying, “Bravo, right thing to do! Short selling should be illegal.” Being at the forefront of one of the world’s most influential sustainable transportation vehicle companies, Musk has repeated over the years that short selling hurts Tesla’s growth.

Mizuno is a proponent of environmental, social, and governance (ESG) investing and spearheaded the investment of ¥3.5 trillion ($32.4 billion) in assets under management (AUM) tracking ESG indices. He recently announced that four out of five of these indices are outperforming their parent indices and market averages over the past two years.

GPIF is the world’s largest public pension fund and owns approximately 10% of Japanese equities and 1% of global equities.

Related Stories:

Goldman Sachs Veteran Tapped as Japan’s GPIF CIO

Japanese Pension Giant GPIF Suspends Stock Lending for Short Selling

GPIF’s Hiromichi Mizuno’s Term Is Extended for Six Months

Tags: , , , , , , , ,

Home > News > Asset Management Culture > Too Rich to Need It? Top Colleges Back Away from US Virus Money
Asset Management Culture

Too Rich to Need It? Top Colleges Back Away from US Virus Money

Harvard, Penn, Yale act after Trump administration says subsidies should go to less wealthy institutions.
By Sarah Min

A group of top colleges said they wouldn’t take coronavirus relief money after receiving criticism from the Trump administration that their endowments were so big they didn’t need the money.

So the University of Pennsylvania turned down a $10 million check. Yale, Princeton, and Stanford followed suit. 

Harvard, too, said it would not access the funds, saying that the “intense focus” by politicians around the school would undermine participation in the relief fund by smaller institutions. 

Education Secretary Betsy DeVos expressed her thanks to the schools. In a tweet, she wrote: “I hope all schools who can afford to do so continue to let the money go to those in greatest need!”

For more stories like this, sign up for the CIO Alert newsletter.

The $14 billion emergency relief fund for higher education created under the Coronavirus Aid, Relief and Economic Security (CARES) Act is allocated to schools based on the number of full-time students who are eligible for Pell Grants, which are meant to support low-income students. 

But allocations to wealthier institutions have come under scrutiny from lawmakers and the public, with many arguing that relief should first go to smaller institutions with fewer resources to weather the coronavirus pandemic. 

Larger applicants for the $350 billion small business loans from the government have also come under the spotlight. Notably, Shake Shack returned $10 million in emergency relief after criticism flared. Ruth’s Chris Steak House also returned a $20 million loan. 

Overall, investments for colleges took a beating in the first quarter, however, which should shrink endowments. Nasdaq’s endowment index dropped 20.24% for the first quarter of 2020, even as a benchmark portfolio of 60-40 stocks and bonds declined 13% during the same period. 

The top schools, though, are not going hungry. As of its 2019 fiscal year, Harvard has a $41 billion endowment. Penn has $14.7 billion. Princeton has $26.1 billion. Stanford has $28 billion, and Yale has $30.3 billion. 

All universities that won’t accept federal largesse insisted that the decision will not diminish their financial support for students, who deserted dorm rooms in the weeks leading up to the national shutdown to continue their lessons online. 

The crisis has meant extra outlays for colleges. Schools have provided emergency funds for students to travel home, and other funds have gone to help those studying abroad. And student employees are still paid even as services have halted. 

Related Stories: 

Endowment Index Tumbles over 20% in First Quarter

At Ivy League Endowments, Performance Dragged Down by Managers’ Picks

Harvard Adopts Goal for ‘Net-Zero’ Greenhouse Gas Emissions by 2050

Tags: , , , , , , , ,

«