New holdings help diversify Yale portfolio

When students Scotch-tape posters to their walls, leave “Post-it” messages for their roommates or have cavities filled, they also may be boosting Yale’s investments.

The total value of the securities Yale holds in its own name fell to $230.6 million, according to a 13-F quarterly holdings report the University filed Feb. 14 with the U.S. Securities and Exchange Commission. But while the overall worth of Yale’s public investments continued to slide, the University’s portfolio — which included a $498,000 investment in 3M, a corporation that in addition to manufacturing office supplies, like Scotch tape, also markets telecom technology and a variety of other products — is more diverse than it was last quarter.

The report indicated an 11 percent drop from the $259.4 million in public holdings reported in the previous filing on Nov. 15. Yale’s public holdings are at their lowest recorded in the SEC’s public archives, which date to 1999.

Yale Chief Investment Officer David Swensen is required to file a 13-F quarterly report because the University manages more than $100 million worth of securities. While it can offer some indication of Yale’s general investment strategy, the report offers only a surface look at the University’s investments, SEC Deputy Director of Public Affairs John Heine said.

“We only see the securities an investor held on the filing date, and we don’t track a lot of trends,” Heine said. “We’re a regulatory agency, and our main focus is just to make sure they’re complying with our regulations.”

Although Yale divested from three of its 14 previous holdings, it picked up six new ones in addition to 3M, including $2,107,000 in shares of three corporations specializing entirely in communications equipment.

3M spokesman Stephen Sanchez said other 3M products include office supplies like Post-It notes and nanotech dental adhesives that strengthen filling bonds with tooth enamel at the microscopic level. Though Yale’s investment in the company is relatively small, it is likely to pay off, Sanchez said, noting that 3M executives expect 12 percent to 14 percent earnings per share growth through 2006.

At time of filing, the University held $1,748,000 in shares of Atheros Communications, Inc., a company specializing in wireless semiconductors; $264,000 in Equinix, Inc., which provides IP network hubs; and $95,000 in Tumbleweed Communications, which sells secure Internet messaging software akin to IPass, Inc., from which the University recently divested.

Yale has also sold its holdings in Standard and Poor’s Depository Receipts Trust and its Morgan Stanley iShares, although Morgan Stanley remains the University’s largest public investment at $73.5 million. iShares are publicly traded shares of a portfolio that track a market index.

In the report, the University listed $1,292,000 newly invested in Nuvasive, Inc., which develops and manufactures spine surgery tools, and two energy interests — Toreador Resources with $542,000 and the manufacturer Harsco with $200,000 — that bolster its pre-existing $219,000 investment in Exxon-Mobil.

Though these investments are only a small percentage of the corporations’ total net worth, spokesmen for the companies said Yale’s presence does not go unnoticed.

“We’re a very shareholder-focused company, and certainly we value all investors,” Harsco Investor Relations Director Gene Truett said. “We value Yale’s as much as anyone else.”

Harsco Corporate Communications Director Ken Julian said the corporation, which traces its lineage back to 1742 and once made cannonballs for George Washington, has seen record growth in the past year and will be a greater boon to shareholders in the future with projected 15 percent growth this year.

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