An Endowment CIO under Stress
Private equity
investor Gary Sernovitz has written a disappointing novel about the trials and
tribulations of college endowment chief investment officer. (CIO) The idea for
the book, which focuses on the stresses and strains of a CIO as he goes through
a year of underperformance. The book excels when it discusses how endowment
investments are made and it demonstrates the folly of having 60 separate
investment managers to run a $6 billion portfolio. We witness meetings with
promoters of every endowment investing fad of the past two decades. All of this
is interesting to a finance geek like me.
However, this is a
novel. The characters are one dimensional. We really don’t get to know the CIO,
the college president, and the head of the academic senate with his zany social
investing ideas. We hardly get to know his small staff who has to put up with
the CIO destroying his laptop computer in a fit of rage.
There is also a
reclusive hedge fund billionaire alum who refuses to give money to the school.
Given the characters in the book, who would give them money and given what is
going on today at many elite colleges, it makes no sense to give money to any
of them. The billionaire’s role in the book is to highlight the absurdity of
the fee driven asset management industry to come up with niche products, that
at the end of the day, likely detracts from investment performance.
My suggestion is that
the book would have been better as nonfiction than fiction.
For the full amazon URL see: An Endowment CIO under Stress (amazon.com)
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