UVA Investment Management Firm Names New CEO, CIO

Robert Durden

The University of Virginia Investment Management Co. (UVIMCO) has named Robert Durden as its new chief executive officer and chief investment officer. Durden will manage the university’s $9.2 billion endowment, as well as other long-term funds invested on behalf of the university and its foundations.

Durden, 44, will join UVIMCO in April, and will replace Lawrence Kochard, who left UVIMCO at the end of 2017 for a position in the private sector.

Durden is currently CIO for Texas Children’s Hospital in Houston, where he oversees $3 billion of investable assets. UVIMCO said Durden’s first priority in his new position will be to preserve the endowment’s investment strategy. According to its latest annual report, the University of Virginia’s endowment returned 12.4% for the fiscal year ending June 30, 2017, which exceeded the inflation-adjusted spending rate of the university by more than 5.0%, and the return of its passive policy portfolio by 1.0%

“The University of Virginia serves as a model of great purpose and leadership, and it is an honor to join and serve this community,” Durden said in a release. “I look forward to working with UVIMCO’s exemplary investment team, board and University administration to support the mission of UVA and its related foundations.”

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Prior to joining Texas Children’s Hospital in 2013, Durden was managing director and head of private assets for Morgan Creek Capital Management, where he led a team managing approximately $5 billion worth of private commitments. Durden earned his MBA from the University of Chicago Booth School of Business, and his AB from Princeton University.

“We undertook a robust search process that produced new leadership for UVIMCO to complement a deep team of professionals already in place,” said David MacFarlane, chairman of the UVIMCO board.

Currently, Kristina Alimard is the interim CEO, and E. Sargent McGowan is the endowment’s interim CIO. When Durden joins the company, Alimard and McGowan will retain their respective roles as chief operating officer and managing director of UVIMCO.

Tags: Robert Durden, Texas Children's Hospital, The University of Virginia Investment Management Co, UVIMCO

To aid New Jersey’s troubled $76 billion pension system, Acting State Treasurer Elizabeth Maher Muoio plans to increase the expected rate of return, then gradually reduce it again.

Reuters reports that the move, which will first boost the rate of return from 7% to 7.5% in fiscal 2019, then lower it to 7% in fiscal 2023, looks to temporarily dodge higher costs involved with the lowering of assumed rates.

Once implemented, the new rate is projected to save roughly $238 million for the state and more than $400 million for local governments in the near term.

In November, the pension system’s rate of return had been cut from 7% to 7.65% by former Treasurer Ford Scudder. However, Muoio, whom New Jersey Gov. Phil Murphy appointed to acting state treasurer in December, argued that the cut would be costly for local governments.

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According to NJ.com, additional costs at a 7.65% rate would mean an extra $52 million for the state, and $91 million for local employers.

The move comes at an interesting time, where due to poor investment returns and the growth of underfunded statuses, most states are lowering their assumptions rather than increasing them. In addition, Murphy—who succeeded Chris Christie in January—is struggling with a shortfall predicament as his first budget proposal will take place later this month.

While the state’s five pension funds performed well in fiscal 2017, returning 13.07%, New Jersey is one of the worst-funded pension plans in the country, with a total funding ratio slightly below 49%.

Tags: Elizabeth Maher Muoio, New Jersey, rate of return