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.

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.