After Scandal, Wesleyan's New CIO (a Swensen Protege) Boasts Above-Average Returns

(February 7, 2011) — Last August, Wesleyan University’s former Chief Investment Officer Thomas Kannam, who was once one of the university’s most highly paid employees, was sued for allegedly mishandling university endowment assets for personal trips and other expenses. He was forced to resign in October.  

Now, the endowment’s current chief investment officer Anne Martin, formerly at Yale’s endowment under the notorious CIO David Swensen, is implementing a new philosophy, university spokesman David Pesci told aiCIO. “Before, we had someone managing under the board of trustees, but Anne is implementing a new philosophy to put us on a more sustainable vision,” he said. Wesleyan’s endowment grew 13% in fiscal year 2010 to $512.9 million — an increase above the average 11.9% for the 2010 fiscal year, as reported by the latest 2010 study by the National Association of College and University Business Officers (NACUBO) and the Commonfund.

“I’m most excited about the fact that our new Chief Investment Officer, Anne Martin, has put in place a process for the rational management of the endowment for the long term,” President Michael Roth told the campus newspaper. “I think what’s really important is that over the long haul we protect the endowment and we help it grow and not be subject to the swings that we’ve seen in the past.”

According to The Argus, Martin, who started August 1 at Wesleyan, said she has high hopes for the future with the endowment pacing itself well to reach its goals, noting a need to increase exposure to emerging markets. Martin was previously at Yale University’s fund overseeing venture capital, energy and commodities investments under David Swensen, who has earned praise from the investment community for pioneering the “Yale model.”

Martin’s predecessor, Kannam, had served as Wesleyan’s director of investments from December 1998 through 2005, when he was promoted to serve as chief investment officer. He resigned after being accused by the university for using Wesleyan employees and university resources to offer research and other services to private firms. As a condition of employment, Kannam was prohibited from serving in any other positions or on boards, compensatory or otherwise, without permission from the university president, yet Kannam failed to seek consent or disclose his affiliations and lucrative outside ventures that persisted throughout his work at Wesleyan.