01
ENDOWMENT REPORT
PAULA BURCH-CELENTANO
ENDOWMENT MANAGEMENT COMMITTEE Mr. Andrew B. Wisdom Crescent Capital Consulting Chair Mr. Michael A. Corasaniti Tourmalet Advisors, LP Vice-Chair Mr. Darryl D. Berger The Berger Company
Mr. Douglas J. Hertz United Distributors, Inc. (ex-officio) Mr. Barry A. Malkin GEM Realty Capital, Inc. Mr. William A. Marko Jefferies LLC Mr. E. Pierce Marshall Jr. Élevage Capital Management, LLC
Mr. David M. Mussafer Advent International Corporation Mr. Rick S. Rees LongueVue Capital, LLC
Table of Contents
Letter from the CIO 1
Endowment Support
2–4, 13
Market Events 5 Endowment Returns
6–12, 14
Staff 15–16 Location 17
LETTER FROM THE CIO
Dear Faculty, Staff, Alumni and Friends of Tulane University, I am pleased to provide an update on the investment results of Tulane’s Endowment for fiscal year 2019. This year’s return of 5.4% for the Pooled Endowment was more modest in comparison to last year, though not without merit. Our results were driven by an overabundance of caution, in particular our decision to hold cash instead of excess public equity or fixed income, rather than poor manager results. Our caution stems from a combination of rich market valuations and increased economic uncertainty, that to date has proven unwarranted. In spite of this, our long term results remain comfortably ahead on a three, five, and ten year basis when compared to our policy benchmark, the passive alternative, and our peers. For the same reasons, Eminent Scholars returned just 4.7% for fiscal year 2019, but has similarly outperformed the relevant longer-term benchmarks. The success of an investment program for an endowment is measured not in years, but in decades. Furthermore, success is measured by preserving the purchasing power of the endowment after spending (i.e., distributions to the University to support the operating budget), after inflation and after all fees and expenses. I am pleased to report that over the last ten years both the Pooled Endowment and Eminent Scholars portfolios have met, and materially exceeded, that objective. Our ten-year report card shows persistent value added across asset classes, a testament to the investment process executed by an experienced and stable staff and the vigilant oversight by the Endowment Management Committee. Over the last decade, that value added has compounded to $146 million of incremental market value across both portfolios, producing $27 million of additional payout to the University.
FISCAL YEAR 2019 ACCOMPLISHMENTS: • Hired three new managers and exited five across the marketable portfolios • Added to, trimmed or re-upped with ten existing managers • Committed $30 million to two new private credit managers • Committed over $80 million to private capital partnerships • Added five new private capital relationships and re-upped with three others • Completed an extensive (ninth annual) review of all managers in the portfolio
While our caution was not rewarded in fiscal year 2019, we remain committed to our investment process which has proven itself over the long-term. We remain committed to the successful stewardship of the Endowment in the decade to come.
• Attended annual meetings across the US and globally
Jeremy T. Crigler Chief Investment Officer Tulane University
• Conducted 850+ manager meetings, calls and conferences
• Performed in depth due diligence trips to India, Argentina, Brazil, and China
2019 ENDOWMENT REPORT | 1
E NDOWMENT SUPPORT IMPORTANCE OF AN ENDOWMENT Protection – Innovation – Commitment After 185 years, Tulane University has established itself as one of the world’s preeminent educational and research institutions. The University’s mission exists in perpetuity. However, to continuously offer new programs and new services requires an ever-growing pool of financial resources. The Endowment is unique among the University’s revenue streams since it provides perpetual support for Tulane’s students, both current and prospective. To put the power of the Endowment in perspective, a $1.0 million gift made ten years ago and invested in the Pooled Endowment generated more than $593,000 in distributions used to recruit the highest quality students regardless of financial need, to pay professorships and fund basic research, and to perpetuate community service initiatives. Most importantly, that original gift remains intact today and will continue to fund Tulane in the future. We urge you to support the Endowment because these specific gifts ensure the long-term financial strength of the Institution, benefiting future generations of Tulanians.
COMPONENTS OF THE ENDOWMENT Pooled Endowment
MARKET VALUE $1,054.7
Eminent Scholars
$210.1
Separately Invested
$148.3
University-Owned Real Estate
$16.6
Gift Annuities/Life Income Trusts
$18.0 $1,447.7
SALLY ASHER
TOTAL ENDOWMENT
2 | 2019 ENDOWMENT REPORT
$1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200
POOLED ENDOWMENT
SEPARATELY INVESTED
FY 2019
FY 2017
FY 2018
FY 2015
FY 2016
FY 2013
FY 2014
FY 2011
FY 2012
FY 2010
FY 2009
FY 2007
FY 2008
FY 2005
FY 2006
FY 2003
FY 2004
FY 2001
FY 2002
FY 1999
EMINENT SCHOLARS
FY 2000
FY 1997
FY 1998
FY 1995
FY 1996
FY 1993
FY 1994
FY 1991
FY 1992
FY 1989
FY 1990
FY 1987
FY 1988
$0 FY 1986
TOTAL ENDOWMENT (IN $MM)
EN DOWM EN T S U PPO RT
GIFTS, ANNUITIES & LIFE INCOME TRUSTS
s
A. B. Freeman School of Business 11% School of Social Work 1%
Financial Aid 10% School of Architecture 2% Law School 6%
School of Liberal Arts 12%
Busines
ork Social W Arts Liberal s Athletic
l Un
Genera
Athletics 1% School of Medicine 30%
General University 14% Centers, Institutes & Libraries 4%
,I Centers Science
School of Science & Engineering 8%
School of Public Health & Tropical Medicine 3%
ENDOWMENT SUPPORT BY PROGRAM 2019 ENDOWMENT REPORT | 3
Public
Medi
Law
Ar
E NDOWMENT SUPPORT Freeman, SLA receive $3.5 million gift for finance, writing programs Tulane University’s A. B. Freeman School of Business and the School of Liberal Arts are the beneficiaries of a new $3.5 million gift from Carole B. and Kenneth J. Boudreaux. The gift will create a scholarship fund for Freeman School graduate students and establish the Kenneth J. Boudreaux MBA ’67 Professorship in Finance. It will also establish the Carole Barnette Boudreaux NC ’65 Creative Writing Endowed Fund, which will launch two programs that will bring both great and emerging writers to campus.
“The university’s consistent integrity, intellectual rigor, success and generous spirit continually impress us. We are delighted to be able to contribute this way.” _______ KENNETH AND CAROL BOUDREAUX
Kenneth J. Boudreaux received his MBA from the Tulane School of Business in 1967 and served as a professor of finance and economics at Tulane before his retirement in 2010. He received a bachelor of arts degree from Princeton University in 1965 and a PhD from the University of Washington in 1970. Carole Barnette Boudreaux received a bachelor of arts degree in English from Newcomb College in 1965. She received a master of education degree from the University of New Orleans in 1973.
Their son Beau Boudreaux holds a PhD in English and is a poet and adjunct professor at Tulane. “Our half century or so at Tulane as students, faculty and alumni has been a wonderfully positive experience,” Kenneth and Carol Boudreaux said. “The university’s consistent integrity, intellectual rigor, success and generous spirit continually impress us. We are delighted to be able to contribute this way.” The couple pledged $2 million to the Freeman School to establish the professorship and to create a new fund to help graduate students pay for tuition and other expenses related to their attendance at Tulane.
4 | 2019 ENDOWMENT REPORT
“University business education is undergoing a period of rapid change, but one thing remains constant — the need for exceptional scholars and educators,” said Ira Solomon, Freeman School dean. “With this generous gift from Ken and Carole Boudreaux, the Freeman School can support the research and teaching activities of an outstanding professor in finance as well as provide financial support to enable the best and brightest students to attend our graduate programs.” The School of Liberal Arts will receive $1.5 million to endow two complementary literary series — a Great Writers Series and an Emerging Writers Series — that will bring both internationally prominent writers and younger talents to campus for readings, lectures, events and panels. “The Carole Barnette Boudreaux Creative Writing Fund allows us to bring some of the most exciting writers of our times to the Tulane campus, and to connect students, faculty, and members of the community with literary artists at the height of their art,” said Brian Edwards, dean of the School of Liberal Arts and professor of English. “The brilliance and generosity of the Boudreauxs’ gift is that it allows us both to host literary superstars and younger novelists and poets whose work is admired by other writers, but not yet internationally famous.”
MARKET EVENTS FY19 Fiscal year 2019 was another tale of two halves. The second half of 2018 saw broad based de-risking across asset classes over heightened trade war tensions, Brexit uncertainty and slowing global growth. The MSCI ACWI fell by -9.4% in 2H18, after sustaining a -14% drawdown in Q4, and the Barclays Global Aggregate Corporate Index dropped -3.6%. The markets quickly reversed course in 1H19 once the global central bank ‘put’ was back on the table and rallied 16.6% and 8.3%, respectively, despite no material changes to geopolitical and economic uncertainties. Despite this volatility, the S&P 500 capped another strong fiscal year, up 10.4%, driven by defensive sectors such as utilities and consumer staples, as well as information technology. Energy was the only sector that posted losses for the year, as investors remain concerned by poor capital allocation. International markets ended the fiscal year up just 1.9%. The broader Asian markets were down slightly, led largely by Japan (-4.0%) and China (-6.5%), although China’s returns were bifurcated between the more robust onshore A-share market and the lackluster ADR and H-share markets. China, in particular, is beginning to see stresses to its economic growth, evident in lower consumer spending and broader corporate deleveraging. Latin America was up 18.9% for the fiscal year, largely led by Brazil, which re-rated on Bolsonaro’s reform agenda. Latin America, however, continues to be incredibly volatile, as evident by Argentina’s near 50% market collapse subsequent to fiscal year-end. In private markets, strong fundraising and mounting dry powder combined with robust debt markets kept private equity valuations at peak levels. High valuations, strong M&A markets, and a resurgence of IPOs in 1H19 led to an eighth consecutive year of distributions outpacing contributions, compelling investors to commit more capital to the asset class. During the 12 months ending 1Q19, Cambridge Associates’ Global Private Equity Benchmark generated a pooled IRR of 12.2%, led by the US which generated a pooled IRR of 15.2%. Private energy markets suffered from volatile oil prices, weak M&A markets and unreceptive public markets, resulting in flat returns for the year. Cambridge Associates’ Natural Resources Benchmark generated a pooled IRR of 0.4% in the 12 months ending 1Q19. Meanwhile, rate volatility made a sudden comeback during the fiscal year. The 10-year bond yield reached a peak of 3.2% in November before dropping to 2.0% by fiscal yearend, below the 3-month T-bill yield of 2.1%. The sudden move in rates led to a healthy +7.9% return in the Barclays US Aggregate Index, the strongest return in over a decade. On the credit side, HY spreads widened out to 538 bps at the end of 2018 and ended the fiscal year at 407 bps, leading to a +7.6% return for the BAML HY Index, despite signs that credit quality is deteriorating.
An inverted yield curve is often, though not always, a harbinger of a recession, as investors seek the safety of long-duration bonds in times of economic and geopolitical uncertainty. Demand for long-duration US Treasuries is also driven by their better relative value vis-avis the $17 trillion in negatively yielding developed market sovereign bonds outstanding. While we do not market time, we remain duly cautious about the market environment and inflation risk. US equity valuations are full but remain significantly more attractive than the bond term premium. International equities are trading at more compelling valuations, but also face stagnant economic growth and geopolitical risks due to populist and nationalist movements. Particularly in periods of heightened uncertainty, we are committed to meeting the Endowment’s long-term return objectives through disciplined asset allocation and acting decisively when valuation opportunities present themselves.
FISCAL YEAR 2019 ENDOWMENT HIGHLIGHTS: • Total Endowment ended the year at $1.4 billion, a new high-water mark
•D istributions to support the operating budget totaled $57.1 million • 1 9 new Endowment Funds were created during the fiscal year •N ew gifts and transfers into the Endowment totaled $37.3 million •C ombined return of +5.3% for Pooled Endowment and Eminent Scholars
CAPITAL MARKETS PERFORMANCE AS OF FISCAL YEAR END 2019
US EQUITY
1 YEAR
3 YEARS
5 YEARS
10 YEARS
NASDAQ 7.8% 19.6% 14.1% 17.3% RUSSELL 2000 -3.3% 12.3% 7.0% 13.4% S&P 500 10.4% 14.2% 10.7% 14.7% _______
INTERNATIONAL EQUITY
MSCI AC ASIA EX-JAPAN -0.2% 11.8% 5.1% 8.2% MSCI AC WORLD EX-US 1.9% 10.0% 2.7% 7.1% MSCI EMERGING MARKETS 1.6% 11.1% 2.9% 6.2% _______
FIXED INCOME
BARCLAYS AGGREGATE 7.9% 2.3% 2.9% 3.9% BARCLAYS 5-YR OTR TIPS 3.2% 1.6% 0.9% 1.9% 8.1% 7.1% 4.2% 8.2% MERRILL LYNCH HY MASTER II _______
MARKETABLE ALTERNATIVES
HFRI EQUITY HEDGE HFRI FUND OF FUNDS HFRI EVENT DRIVEN
0.3% 1.2% 1.2%
6.8% 4.3% 6.3%
3.4% 2.2% 2.8%
5.4% 3.2% 6.1%
2019 ENDOWMENT REPORT | 5
E NDOWMENT RET URNS POOLED POLICY PORTFOLIO
POLICY PORTFOLIO
The market value of the Pooled Endowment was $1.054 billion as of June 30, 2019. The investment of Tulane University’s endowment assets is governed by the Investment Policy Statement, which is reviewed at least annually by the Endowment Management Committee of the Board of Administrators. This document sets forth governance principles, investment objectives, and risk parameters. The Policy Portfolio for the Pooled Endowment included in the Investment Policy Statement represents the expected allocation of assets that will satisfy these return objectives and risk parameters. While formulated based on long-term data series, the Policy Portfolio is dynamic and responsive in its implementation to prospective economic conditions, risks, and opportunities presented by market dislocations. The static benchmark uses the weights of the Policy Portfolio as shown to the right and serves as one of the Pooled Endowment’s performance benchmarks. Over the long-term, the goal is to preserve the purchasing power of the endowment after spending and inflation.
Cash 1.0%
Fixed Income 9.0%
Cash
Private Real Assets 10.0%
Global Equity 30.0%
Private
Public Real Assets 2.5%
Public R
Market Marketable Alternatives 27.5%
Private Private Equity 20.0%
Global
HISTORICAL PERFORMANCE (NET OF FEES)
15%
10.5% 10%
9.2%
8.9%
5.4%
5.9%
6.7%
7.1%
7.9%
7.2% 5.7%
6.5%
6.8%
5%
0%
CHERYL GERBER
-5%
6 | 2019 ENDOWMENT REPORT
Fixed In
1 YEAR POOLED
3 YEARS STATIC BENCHMARK
5 YEARS
10 YEARS SPENDING + CPI
EN DOWM EN T RET U RN S POLICY PORTFOLIO Cash 1.0%
Cash
Fixed Income 25.0%
Fixed Inc Global Equity 51.5%
Private Re
Public Re
Private Real Assets 2.5%
Marketab
Public Real Assets 5.0%
Private Eq Marketable Alternatives 10.0%
Global Eq
CHERYL GERBER
Private Equity 5.0%
HISTORICAL PERFORMANCE
EMINENT SCHOLARS POLICY PORTFOLIO The Endowed Chair and Endowed Professorship programs under the Louisiana Board of Regents matching program are collectively known as the Eminent Scholars Endowments. The investment of these assets is governed by the same Investment Policy Statement as the Pooled Endowment. However, the Eminent Scholars’ Policy Portfolio is tailored to satisfy specific conditions of this matching program. These conditions include greater reliance on public stocks and bonds and limited use of hedge funds and private capital. The resulting benchmark for the Eminent Scholars Endowments shown to the right is therefore different from that of the Pooled Endowment. Despite these differences, both the Eminent Scholars and Pooled Endowment portfolios have generated similar 3- and 5-year annualized returns. In recent years, the conditions of the matching program were broadened allowing for a more dynamic, diversified asset allocation. Mindful of the conditions under which these funds are generously matched by the state, many of the same investment managers and strategies are used in both portfolios.
(NET OF FEES)
15%
9.3%
10%
9.0% 8.2%
8.2% 6.3%
1 YEAR
6.5%
6.8%
5 YEARS
10 YEARS
6.6% 5.3%
4.7%
5%
0%
7.1%
6.7%
3 YEARS
EMINENT SCHOLARS
STATIC BENCHMARK
SPENDING + CPI
2019 ENDOWMENT REPORT | 7
E NDOWMENT RET URNS
8 | 2019 ENDOWMENT REPORT
EN DOWM EN T RET U RN S ASSET CLASS SUMMARIES GLOBAL EQUITY
The Endowment’s Global Equity portfolio is comprised of 14 managers who invest in publicly-listed companies across US and international markets. The portfolio aims to capture the growth of the global economy and invests alongside active managers who employ differentiated strategies to outperform passive indices. During the fiscal year, the portfolio returned 4.7%, slightly underperforming the 5.7% return of the MSCI All Country World Index. The domestic portfolio beat its US benchmark by nearly 300bps, while the international portfolio failed to keep pace. Longer-term results remain strong. Over the last three, five, and ten years, the Global Equity portfolio has outperformed the MSCI ACWI Index. During the year, our team was unusually active in adding three new managers: a biotechnology specialist, a US mid-cap value manager, and a global growth manager.
PRIVATE EQUITY
The Endowment’s Private Equity portfolio consists of 35 firms investing globally across buyout, venture capital, growth equity, and distressed strategies. The portfolio generated an outstanding return of 19.4% during the year on a mark-to-market basis, primarily driven by strong company-level growth, M&A activity, and initial public offerings. Our team was very active during the year, adding five new managers including three in venture, one in Chinese healthcare and one focused on small special situations investments. In addition, we re-upped with three of our top buyout managers.
MARKETABLE ALTERNATIVES
The Endowment’s Marketable Alternatives portfolio aims to achieve attractive riskadjusted returns that are uncorrelated to traditional asset classes, providing valuable diversification and downside protection in times of market stress. The Marketable Alternatives portfolio consists of 18 managers providing exposure to strategies such as long/ short equity, multi-strategy, event-driven, alternative risk premia, as well as private and opportunistic credit. During the fiscal year, the Marketable Alternatives portfolio returned +2.5% versus the HFRI Fund of Funds Composite return of +1.4%, largely driven by returns in the Long/Short Equity and Enhanced Fixed Income strategies. A long/ short TMT manager, long/short global value manager, and a multi-strategy hedge fund were the largest contributors to returns. Market neutral managers that were exposed to the value premium were the largest detractors. The fiscal year saw reduced activity in both new additions and redemptions across the portfolio. The Endowment re-upped with one private credit manager and terminated a long/short equity and an event-driven manager.
PUBLIC REAL ASSETS
The Endowment’s Public Real Assets portfolio is intended to protect against unanticipated spikes in inflation and provide liquidity for growing the Private Real Assets portfolio. Inflationary spikes can manifest in various ways, so Tulane holds a diversified mix of assets to hedge against inflation risk. The portfolio currently consists of only one manager that invests in US midstream energy assets and MLPs. During the fiscal year, The Public Real Assets Portfolio detracted -3.8%, largely driven by the steep decline in oil prices and broader market selloff in Q4 of 2018. We remain underweight the asset class and continue to allocate capital toward more promising opportunities elsewhere. The Endowment terminated a long volatility energy manager during the year.
PRIVATE REAL ASSETS
The Endowment’s Private Real Assets portfolio primarily consists of energy, real estate, and to a lesser extent mining. A difficult environment in energy led to a return of just 3.6% for the asset class. However, despite a low return in absolute terms, the Private Real Assets portfolio slightly edged out the benchmark return of 3.4%. The environment for real assets continues to be challenged by low valuations within energy and mining and low cap rates in real estate. While we did not add any new Private Real Assets managers during the year, we continue to look for pockets of value within the asset class.
FIXED INCOME
The Endowment’s Fixed Income portfolio includes exposure to US Treasuries, investment grade bonds, and high-quality mortgage-backed securities. Fixed income generally provides moderate returns and dampens volatility by serving as a hedge against deflation and negative events in the equity markets. We view this portfolio as a liquidity pool under crisis conditions. Fixed Income markets remain challenging especially in light of a US inverted yield curve and historic low yields, not to mention the $17 trillion in global negative interest rate bonds. The Tulane Fixed Income portfolio generated a return of 6.4%, underperforming the Barclay’s Aggregate Index by 148 bps, which returned 7.9%, largely due to a shorter duration portfolio. We remain underweight the asset class, which is offset with a higher allocation to cash.
2019 ENDOWMENT REPORT | 9
EN DOWMENT RET URNS PAULA BURCH-CELENTANO
TOTAL POOLED AND EMINENT SCHOLARS VALUE ADDED Together, the Endowment Management Committee and Staff strive to add value over the Policy Portfolio through manager selection, constructive asset allocation, and tactical implementation without adding undue risk. As shown in the graph below, our collective effort over the last ten years has produced a compounded $146.1 million of additional value, resulting in $27.4 million of additional payout to the University over the past decade. During this period, the Endowment has also had a lower realized volatility. Our collective investment process seeks to continuously enhance the risk-adjusted returns of the portfolio given the current economic environment to preserve the purchasing power of the Endowment over time.
POOLED + EMINENT VS. STATIC BENCHMARKS $140.0 -$8.6 $17.3
$120.0 $100.0
$37.2 $80.0
-$7.0 $30.6
$60.0 $40.0
$13.0 -$12.7 $15.1
FY 10
FY 11
$2.1
FY 12
FY 13
FY VALUE ADDED
10 | 2019 ENDOWMENT REPORT
$20.0
$22.1
FY 14
FY15
FY16
CUMULATIVE VALUE ADDED
FY17
FY18
FY19
$-
EN DOWM EN T RET U RN S PAULA BURCH-CELENTANO
ENDOWMENT PERFORMANCE VS. CAMBRIDGE PEERS A wide variety of metrics, such as a constructed asset class benchmark based on our policy portfolio or a passive market index, are used to evaluate the performance of our portfolios. Most importantly, we measure our long-term results versus our principal objective, which is to preserve the purchasing power of the Endowment after spending and inflation. However, we also pay attention to how our colleagues at other foundations and endowments manage similar long horizon portfolios. In this regard, Tulane had a respectable year given that the average endowment returned 4.4% and the cutoff for top quartile was 5.45%. Of the ~370 institutions reporting to Cambridge Associates, Tulane’s 5.27% for fiscal year 2019 is slightly below the top 25% of all returns in the country. More importantly, our three-, five-, and tenyear returns also fall in the top quartile. But much like U.S. News & World Report rankings, these data points make for good cocktail chatter but are not our primary objective. We have immense respect for our industry colleagues, each of whom has a unique risk profile driven by institutionally specific criteria. We often invest in many of the same managers and openly share our research and analysis. And so, while our peer ranking is noteworthy, it is just one metric among many that we use to evaluate results.
TULANE VS. CAMBRIDGE ENDOWMENT COMPOSITE (PERIODS ENDING 6/30/2019)
14.0%
TOP 5% 12.0%
TULANE
10.0%
25%–50% X
8.0%
50%–75%
X
X 6.0% 4.0%
BOTTOM 5%
X
X
MEDIAN
2.0%
1 YEAR
TULANE 5.3% TOP Q 5.5% MEDIAN 4.4% N 370
3 YEARS
10.3% 9.3% 8.5% 371
5 YEARS
7.1% 5.5% 4.8% 365
10 YEARS 9.2% 8.9% 8.1% 341
Peer data from Cambridge Associates Final 6/30 data as of September 6, 2019
2019 ENDOWMENT REPORT | 11
E NDOWMENT RET URNS 5- AND 10-YEAR PERFORMANCE VS. PEERS
SHARPE RATIO
Tulane’s Endowment has enjoyed particularly strong results over the last five and ten years. Generally, strong returns should be viewed with some skepticism, since higher returns are often the result of taking additional risk. However, Tulane has achieved strong returns without taking on additional risk, as evidenced by the Sharpe ratio. Over the last five years, the Endowment’s Sharpe ratio was 1.24x, ranking Tulane in the 6th percentile among peers. Similarly, over the last ten years, the Endowment achieved a Sharpe ratio of 1.4x, placing it in the 11% percentile among peers.
TULANE UNIVERSITY
0.3 0.5 0.7 0.9 1.1 1.3 1.5
Another way to show the relationship between risk and return is using a scatter plot. When compared to the 344 endowments in the Cambridge Associates database, the Endowment ranks in the 15th percentile for both return and volatility, as shown in the upper left quadrant of the chart below. The combination of unusually muted market volatility along with Tulane’s asset allocation and strong manager selection has resulted in exceptional risk-adjusted returns over the last five and ten years.
10 YEAR RISK VS. PEERS
12.0 11.0
10 YEAR RETURN
10.0
TULANE
9.0 MEDIAN
8.0 7.0 6.0 5.0 4.0 4.0
5.0
6.0
12 | 2019 ENDOWMENT REPORT
7.0 8.0 9.0 10 YEAR VOLATILITY
10.0
11.0
12.0
EN DOWM EN T S U PPO RT Tulane alumni couple donates $5 million for Presidential Chair Tulane University has received a $5 million commitment to fund a Presidential Chair from alumni Marcela Villareal de Panetta and Bernard J. Panetta II. Ms. de Panetta is a member of the Board of Tulane and the Dean’s Council of the Tulane School of Public Health and Tropical Medicine. Her husband and fellow Tulane graduate, Bernard, is a trial lawyer. Tulane will establish the Panetta Family Presidential Chair Endowed Fund to support a professor in an interdisciplinary area of academic study associated with the Tulane Brain Institute. The Panettas have requested that the initial chair holder be a scholar whose research focuses on hormone-brain interactions in response to trauma and violence. “Trauma and violence are impossible to avoid. We see their effects every day. We know that they are life altering. Trying to unravel the mysteries that show us the effects of trauma, physical, emotional and spiritual, is the work that is done every day at the Tulane Brain Institute. I believe this work is vital if we, as the human race, are to heal ourselves. This is why I am immensely proud and honored to be able to underwrite this interdisciplinary Presidential Chair. Because we must begin to understand so that we can begin to heal,” de Panetta said. “Once again, the Panettas have demonstrated their dedication to Tulane and their commitment to advancing research and discovery in one of the most fascinating and exciting areas of science — the very center of human knowledge and consciousness,” Tulane President Mike Fitts said. Presidential Chairs are one of the top priorities for Fitts as he seeks to attract some of the world’s most renowned faculty members in areas such as biomedicine, coastal restoration, global health and fields not yet explored. These faculty members will embark on a pursuit of teaching and research that crosses multiple disciplines and helps transform the world. The Panetta Chair is the sixth Presidential Chair to be established. In their commitment to Tulane, the Panettas envisioned that this chair would further enhance the robust collaborations already underway between the Brain Institute and the Tulane School of Medicine, the School of Public Health and Tropical Medicine, the School of Science and Engineering, and the School of Social Work.
In addition, de Panetta has served on the boards of various companies and cultural institutions in the United States and Mexico. She has the distinction of being one of the first women to serve on a major Mexican board, ARCA - CONTAL, where she promoted significant changes that made recycling and sustainability priorities for the company. Bernard Panetta earned a bachelor’s degree in liberal arts from Tulane. He also earned a law degree from Georgetown University. He served as an Assistant United States Attorney in Washington, D.C., from 1973 to 1979 and then an attorney in the Department of Justice in Washington D.C. from 1979 to 1983. The Panettas’ daughter, Victoria E. Panetta, graduated from Newcomb-Tulane College in 2008 with a bachelor of arts degree. Ms. de Panetta’s father, Leopoldo Villareal, graduated from the Tulane School of Medicine in 1934. Her brother Leopoldo M. Villareal Jr. also attended Tulane.
Marcela Villareal de Panetta earned a bachelor of arts degree from Newcomb College. She lives in Juarez, Mexico, where she helped create the Fondo Guadalupano, a fund to support Mexican citizens studying at the Tulane School of Public Health and Tropical Medicine. 2019 ENDOWMENT REPORT | 13
E NDOWMENT RET URNS SEPARATELY INVESTED FUNDS Large endowments, typically $1 million or more, which are not invested in the Pooled Endowment due to specific donor restrictions are invested separately. These funds are overseen by the Department of Treasury and Trust Investment Office in New Orleans. At fiscal year-end, the Separately Invested Endowment Funds totaled over $148 million. They are comprised of common stock, fixed income, private equity, venture capital, money market, and donor-directed externally managed accounts.
GIFT ANNUITIES AND LIFE INCOME TRUSTS Tulane University Life Income Trusts and Annuities totaled over $18 million as of June 30, 2019. Most of these assets are managed by State Street Global Advisors (SSGA), and payments are made to the donor or other designated beneficiaries for a specified term or life of the beneficiaries. The remainder assets are typically contributed to Tulane’s Endowment. These funds are comprised of common stock, fixed income, and real estate investment trusts. The asset allocation is determined based on age of beneficiaries, term of trust, payout rate, and any special circumstances.
SEPARATELY INVESTED ENDOWMENT FUNDS
MARKET VALUE
Murphy Institute
$85.1
Celia Scott Weatherhead
$36.0
Samuel Stone CIPR Trust
$17.7
Vanselow/Pediatric
$3.5
All Others Combined
$6.0 $148.3 SALLY ASHER
TOTAL SEPARATELY INVESTED
14 | 2019 ENDOWMENT REPORT
PAULA BURCH-CELENTANO
STA F F
JEREMY CRIGLER, CHIEF INVESTMENT OFFICER
Jeremy joined the Investment Management Office in January 2008 and is responsible for all aspects of managing the endowment and related assets. His 25+ years of investment experience include Senior Investment Officer at Cornell University and Investment Director at Duke Management Company. He has a BSM in Finance from Tulane’s A. B. Freeman School of Business and an MBA from the Fuqua School of Business at Duke University. He is also Chairman of the Board of Trustees of Cardigan Mt. School.
RICHARD CHAU, MANAGING DIRECTOR
Richard joined the Investment Management Office in September 2013. Prior to Tulane, he helped manage a multi-billion dollar global private equity portfolio in Bessemer Trust’s Private Equity Funds Group. Before Bessemer, Richard worked in the investment office at The Andrew W. Mellon Foundation. His previous experience also includes investment banking at Houlihan Lokey and investment consulting at Cambridge Associates. Richard has a BA in Economics and Chinese from Williams College and an MBA from Columbia Business School.
JULIA MORD, MANAGING DIRECTOR
Julia joined the Investment Management Office in May 2014 and is responsible for all public markets investing. From 2006 to April 2014, Julia was an investment officer at AI International, an NYC-based family office, where she was responsible for co-managing a multi-asset class portfolio. Prior to her experience at AI International, Julia worked at Jefferies & Company and Ernst & Young. Julia has a BA in Economics from the University of Chicago, an MBA from The Wharton School at the University of Pennsylvania and is a CAIA charterholder.
PAUL WEAVER, DIRECTOR OF INVESTMENT ACCOUNTING
Paul joined the Investment Management Office in September 2008. From 2005 to 2008, Paul worked at OpHedge Investment Services as Director of Fund Accounting where he was responsible for managing the accounting group and for calculating NAVs of large, complex hedge funds. Before OpHedge, Paul had over 20 years of experience working in various accounting related roles for both hedge funds and large financial firms. Paul holds an MBA with a concentration in International Finance from Pace University.
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STA FF JAKE KRIEGSFELD, DIRECTOR
Jake joined the Investment Management Office in June 2013 after previously completing an internship with the Office. He graduated summa cum laude from Tulane’s A. B. Freeman School of Business in 2013 with a BSM in Finance and as a member of the William Wallace Peery Society, which recognizes 15 graduating seniors for academic excellence. Jake also earned a minor in Spanish and completed an international business program in Madrid, Spain. Jake is a CFA charterholder.
BRAD BAUGUSS, INVESTMENT ASSOCIATE
Brad joined the Investment Management Office in July 2015 after completing an internship with Intrepid Capital Management the previous summer. He graduated cum laude from Tulane’s A. B. Freeman School of Business in 2015 with a BSM in Finance and Economics and a Specialization in Entrepreneurial Management. Brad is a CFA charterholder.
EDWARD ROMAN, INVESTMENT ANALYST
Edward joined the Investment Management Office in August 2018 after completing an internship with the Office. He graduated magna cum laude from Tulane’s A. B. Freeman School of Business in 2018 with a BSM in Finance and Management Consulting and a minor in Economics. Edward is a CFA Level II candidate.
MAX GEVIRTZ, INVESTMENT ANALYST
Max joined the Investment Management Office in February 2019. From August 2016 to January 2019, Max worked at Grant Thornton LLP in their Advisory Services department. He graduated cum laude from Tulane’s A.B. Freeman School of Business in 2016 with a BSM in Finance and a Master of Accounting. Max is a CPA and is a CFA Level II candidate.
JANINE JANDROSITZ, DEPARTMENT ADMINISTRATOR
Janine joined the Investment Management Office in August 2016. Before joining the team, she worked for ten years as the VP of Administration for Lincoln Healthcare Leadership where her role encompassed Human Resources and Office Management. She also worked as an Executive Assistant for Greenbriar Equity. Janine has a BS in Business Management from the University of Redlands. Robert joined the Investment Management Office in January 2017. From November 2014 to January 2017, Robert worked in the Margin Lending department at Goldman Sachs. Before that, he worked at Interactive Brokers and interned at UBS Private Wealth Management. He received his BS in Mathematics and Finance from Sacred Heart University in 2012. 16 | 2019 ENDOWMENT REPORT
PAULA BURCH-CELENTANO
ROBERT LYCOUDES, PERFORMANCE ANALYST
SALLY ASHER
LO C AT I O N
LOCATION, LOCATION, LOCATION As one of the first universities to locate their investment office away from campus — 1,354 miles away in Darien, Connecticut — Tulane has been recognized for its innovative approach to endowment management, paving the way for several other schools to follow our path and locate off-campus. Our motivation to locate the office in the New York City region was to provide staff with the best possible access to investment managers, research firms and industry conferences that are frequently held within the New York and Boston corridor. The central location allowed the team to participate in over 850 manager meetings, calls, and conferences in fiscal year 2019 alone. Conveniently located right off of the Metro North rail line and I-95, the office location allows for a quick trip into Manhattan or other nearby financial centers including Greenwich, Stamford, Boston, and Washington, DC. 2019 ENDOWMENT REPORT | 17
The Commons Dedicated September 2019
Photo by Paula Burch-Celentano
Tulane University • Investment Management Office • 9 Old Kings Hwy, South • Darien, CT 06820 • (203) 716-8470