Activist pushes investing transparency

Martin Bourqui, a young activist for responsible investing, suggested Friday that the Yale Investments Office needs to manage the University’s $19.4 billion endowment in more socially and environmentally responsible ways.

In an afternoon talk at St. Anthony’s Hall attended by about a dozen students, Bourqui, national organizer for the Responsible Endowments Coalition, charged that the current investment strategies of universities like Yale are opaque to the public and seek solely to maximize profits. He argued that the nontraditional investing model pioneered by Chief Investment Officer David Swensen has prompted universities nationwide to focus their portfolios on more complex, risky investments that disregard social and environmental harms.

“Schools are nonprofit, taxpayer-supported, mission-driven institutions,” Bourqui said. “If most people were aware of [these investment strategies], they’d think they were not aligned with their values.”

The Responsible Endowments Coalition was launched by student activists from Barnard, Duke, the University of Pennsylvania, Swarthmore and Williams in 2004, in an effort to use university endowments to change corporations for the better. The coalition aims to help students begin advocating for ethical investment on their own campuses, Bourqui said.

The effort has been well-received at many colleges and universities across the country, Bourqui said. He cited Middlebury College, which started a Sustainable Investments Initiative in May 2010, as a school with institutional awareness about responsible investing. At the time, Middlebury president Ron Liebowitz announced in a press release that the school was excited to create an initiative that would further Middlebury’s educational mission in a socially and environmentally friendly manner.

Bourqui also praised Franklin & Marshall College for its investing efforts, adding that he met with the school’s president on Wednesday to discuss responsible investing.

But Bourqui took a more critical view of Yale, and much of that criticism was directed at Swensen.

“When he says jump, Wall Street says, ‘How high?’” Bourqui quipped.

Swensen came to Yale in 1985 and guided the University’s investments into largely illiquid assets, such as real estate and private equity. Though Yale’s endowment plunged 24.6 percent immediately after the recession hit in 2008, the University has outperformed many of its peers in the long run, with an annual return of 10.1 percent over the past 10 years.

While Bourqui acknowledged the success of Yale’s investing strategies — which helped the endowment return 21.9 percent on investments in fiscal year 2011 — he called the system “unsustainable” and argued that “there does need to be a major shift in our collective consciousness.”

When pressed by the audience to name specific examples of current unethical investments Yale might hold, Bourqui encouraged students to demand more accountability from those in charge of handling the University’s endowment. He said the Investments Office is “opaque,” making it difficult to hold them responsible for investment choices.

After hearing the talk, Avani Mehta ’15 said she wanted to read more about ethical investing and “elevate the level of discourse” on the issue at Yale.

Julia Calagiovanni ’15 echoed Mehta’s sentiment, adding that it was “interesting to hear that this was a systematic problem among universities.”

A representative of the Yale Investments Office who attended the talk declined to comment.

The national average among 823 endowment returns for colleges and universities in fiscal year 2011 was 19.2 percent, according to the 2011 NACUBO-Commonfund Study of Endowments.

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