NYU Hires Health Care Veteran as CIO | Chief Investment Officer

New York University’s $3.5 billion endowment has hired Kathleen Jacobs as its new CIO, succeeding Tina Surh who left the post at the end of last year.

Jacobs, currently the managing director of New York-Presbyterian Hospital’s office of investment, will join the university in August.

“She impressed us with her good judgment, her equanimity, her record of successes, and her experience with the kind of strategies and assets that are relevant to the management of NYU’s endowment,” said Joel Ehrenkranz, the chair of NYU’s investment committee board.

According to the university, NYU’s endowment has tripled in size since 2002. It was also ranked 27th in size overall among colleges and universities as of June 30, 2014 by a NACUBO survey.

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The fund also returned 8.5% annually for the five years ending September 31, 2014, and 13.7% in the fiscal year ending August 31, 2014.

“I look forward to doing my part through the management of the endowment to help NYU sustain its academic momentum and global reputation for excellence,” Jacobs said in a statement.

Jacobs is no stranger to managing university endowments.

Prior to her seven-year tenure at New York-Presbyterian, she served as senior investor at the Juilliard School of Endowment. The investment chief also worked as vice president at Goldman Sachs and JP Morgan.

Jacobs holds a bachelor’s degree from Bucknell University.

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The University of California Regents is planning a major overhaul of the target asset allocation and benchmarks for its long-term investment pool.

CIO Jagdeep Bachher proposed more than doubling the $7.6 billion Total Return Investment Pool’s (TRIP) exposure to fixed income, and wants to slash the target for equities, according to documents on the UC Regents’ website.

The new strategic asset allocation would also involve cutting out real estate investment trusts altogether—currently TRIP has a specific allocation of 10% to this sector—and removing “cross asset class” as a specific allocation, following a “strategic review and exposure analysis.” The fund’s current 10% allocation to absolute return strategies would be increased to a target of 15% under the proposals.

In a presentation to the board of the Regents, Bachher recommended changing the pool’s equity benchmark to the MSCI ACWI IMI index, cutting back on emerging markets and increasing exposure to non-US developed markets.

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In fixed income, the new benchmark informing its revised target allocation would be the Barclays Capital US Aggregate index. This would remove emerging market and high yield debt from the target allocation.

“Allocation to emerging market debt and high yield represents opportunistic bets in fixed-income markets, and removing them from benchmark will provide the ability to better assess the impact of our decision to over or underweight these exposures given market conditions,” Bachher wrote in the presentation.

TRIP asset allocation changes

The changes are designed to reduce the risk in the TRIP and “optimize allocation” between the three main investment pools overseen by the Bachher’s office.

Since August 2008, TRIP’s equity has doubled from 25% to 50% of the portfolio, while fixed income has fallen from 75% to 37%. The portfolio had 13% in alternatives at the end of March, having introduced this exposure in August 2013.

As well as TRIP, Bachher and his team manage a short-term investment pool, with $8.3 billion in assets, which is designed to provide funding to briefer projects for the university, and the general endowment fund, which provides income for individual endowments.

Since Bachher took charge of the University of California’s investment department last April, he has hired or promoted more than a dozen staff members, including two former public pension CIOs: Scott Chan and Sam Kunz.

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