Goldman Sachs Tries to Snag Endowment Chiefs

(April 12, 2010) — Goldman Sachs, the investment bank that has emerged as the most profitable in Wall Street history and the target of public resentment following the financial crisis, is scouting out endowment heads to join its asset-management group.

“When they hire a CIO, not only can they then sell their product better, but that gives them internal knowledge,” Charles Skorina, whose headhunting firm Charles A. Skorina & Co. in San Francisco advises endowments, said in an interview last week with Bloomberg. “This guy comes into Goldman and the Goldman guys say, ‘OK, what kind of products does an endowment need and how should we structure our products so we can go and sell a complete set?’”

The financial behemoth is propagating a trend within the asset management space, as managers recruit CIOs from schools to head their endowment units. In July, Perella Weinberg hired the former CIO of the University of Colorado Foundation, Christopher Bittman. In June, David Russ, a former manager of Dartmouth College’s endowment fund, was hired as the chief investment strategist in asset management at Credit Suisse Group. U.S. college and university endowments lost an average of 19% or nearly one-fifth of their value in the 2009 fiscal year. It was the biggest yearly loss in the 35 years for which records have been kept.

With plans to expand its 50-person team, the portfolio-solutions group, which is part of Goldman Sachs Asset Management, began looking for chief investment officers and money managers at endowments late last year using headhunter Charles Sterling Group LLC in Boston. The bank has been in communication with candidates from pension funds, endowments and other asset managers, according to people with knowledge of the search, Bloomberg reported.