Exclusive: George Washington University to Outsource Endowment

(March 7, 2014) -- George Washington (GW) University has decided to outsource the management of its $1.4 billion endowment, aiCIO can reveal.

A spokesperson for the university has confirmed the plan, and said a request for proposals will be issued for outsourced-CIO (OCIO) firms.

“The university decided that the best option for managing the investment of its growing endowment is to take advantage of the broad expertise and experience that an investment firm can offer,” the spokesperson said. “This decision is similar to other outsourcing decisions the university has made in certain specialized areas previously.”

CIO Don Lindsey will be one of seven investment staff members to lose his job after the fund’s management transitions to an outside firm. Six will be laid off, and one will move to a position at another office within the university.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

The office will continue to operate with a two-person team in charge of liaising with the OCIO, oversight of strategic equity managers, and audit functions. Following the termination of the internal CIO role, these two staff members will report to Ann McCorvey, GW’s deputy executive vice president and treasurer.

Several Washington, DC-based sources in asset management reported a recent influx of resumes and job inquiries from GW investment staff.

Signs of dysfunction within the endowment office have surfaced over the last year.

In October, the former director of operations and risk filed a lawsuit claiming she had been fired after attempting to blow the whistle on fraudulent financial reporting. Carol Ann Lindsey had served six years in the directorship before her dismissal.

The fund lost another two senior staff members in the last two years. Rodney Lake, a senior investment officer, and May Ng, the endowment’s former director of investment strategy and research, both stepped down. Ng had spent seven years in her role, and now works at the Annie E. Casey foundation.

However, the university maintained that, “the decision to outsource this function is not a reflection on the investment office or its personnel. We appreciate their service to the university.”

By the investment office’s own admission in its 2013 annual report, the portfolio has "struggled" in recent years.

(March 7, 2014) — The International Forum of Sovereign Wealth Funds (IFSWF) has decided to move its Secretariat office from premises at the International Monetary Fund in Washington DC to the City of London.

IFSWF Chair Bader M Al-Sa’ad said the relocation would allow the body to further the IFSWF mandate and “expand its activities”.

Daniel Godfrey, chief executive of UK trade body the Investment Management Association (IMA) welcomed the news, saying the move would help to enrich and expand the international voices and viewpoints represented in the UK’s financial centre.

“Many sovereign wealth funds already appoint UK-based investment managers and this move will help to strengthen the collaboration between sovereign funds and UK investment managers,” he said.

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

“At the IMA, we look forward to working with the IFSWF on matters of mutual interest, such as long-term investment and the role of asset managers and owners in supporting long-term and sustainable wealth creation to the benefit of both end investors and economies.”

The UK Chancellor George Osborne also praised the decision, saying the IFSWF’s decision had been driven by London’s “ease of access, ease of doing business, the quality of the legal and regulatory environment and wealth of skilled labour”.

The IFSWF has 26 global sovereign wealth funds as members, including Australia, Azerbaijan, China, New Zealand, Norway and the United Arab Emirates.

It was established in 2009 to exchange views on issues of common interest and to facilitate an understanding of SWF activities and the Santiago Principles.

The IFSWF isn’t the only one opening offices in the UK’s capital: Alberta Investment Management Corporation’s (AIMCo) announced earlier this year that it would open a two-man office in London, and the Canada Pension Plan Investment Board and the Kuwait Investment Authority already have offices in the city.

Readers can find more about asset owners launching satellite offices around the world here.