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Smith College Will Move Endowment Management Functions In-House

News of Note

  • December 17, 2020
  • By Stacey Schmeidel

Smith College today announced that it would shift from outsourcing its endowment management functions to establishing its own in-house investment office. 

The decision, which follows more than a year of deliberation on the part of trustees and senior college administrators, puts Smith’s working model in line with that of most colleges and universities with comparable assets. 

In a message to the college community, Smith President Kathleen McCartney and Board of Trustees Chair Alison Overseth ’80 noted that the move, known as “insourcing,” will enable the college to have greater direct control over its largest financial asset—its endowment. 

Since 2004, the college has outsourced the management of its endowment to Investure, an investment management firm serving a consortium of select colleges, universities and foundations. 

Smith will continue to work closely with Investure over the next several years as the college transitions its investment positions and completes other necessary administrative arrangements. 

“We are profoundly grateful to Investure for the transformational role they have played in our endowment management and for all that their work has enabled Smith College to accomplish,” McCartney said.

Bruce Miller, Investure’s chief executive officer, said, “It has been an honor to partner with Smith College for so many years. Investure was founded on the premise of serving nonprofit institutions, with the goal of generating excellent long-term investment performance. We are proud of our role in helping Smith successfully grow their endowment, and we look forward to supporting Smith in the coming years in this next phase.”

A search for the college’s first chief investment officer will begin shortly. To be chaired by Trustee Deborah Farrington ’72, chair of the Investment Committee of the board of trustees, the search will be supported by David Barrett Partners.

The new CIO will report to the president and will work closely with the Investment Committee and with David DeSwert, vice president for finance and administration. Once on board, the CIO will establish an office and staffing to support an outstanding investment management operation.

Smith’s relationship with Investure dates to 2004. Smith was one of Investure’s founding clients and has been served exceptionally well by the firm’s expertise and talent, Farrington said. Over the past 16 years, Smith’s endowment value has grown from roughly $900 million to over $2 billion, due in large part to cumulative portfolio returns of more than 300 percent and top quartile long-term performance among colleges and universities. During that time, the endowment contributed more than $1 billion in support of Smith’s mission. Today, Smith’s endowment ranks among the largest in the nation. 

Smith College has long benefited from the solid financial foundation of its endowment. Philanthropic giving from generations of alums and other friends of the college, combined with prudent spending and strong endowment management, have enabled Smith to invest in such key areas as student financial aid, faculty recruitment and retention, and a strong academic program. 

Founded in 1871, Smith College educates women of promise for lives of distinction, developing leaders for society’s challenges. One of the largest women’s liberal arts colleges in the United States, Smith enrolls 2,600 students from nearly every state and more than 50 other countries.