Endowment Up Despite Dismissal of CIO
By Lydia Tomkiw, Editor-in-Chief
The University’s endowment has rebounded from its March 2009 low of $442 million, its lowest point since 2003, to start 2010 at $523 million. The endowment began to increase last semester and hit $513 million in September. According to the administration, former Vice President of Investments and Chief Investment Officer (CIO) Thomas Kannam’s alleged breach of contract has had no effect on the endowment.
The University filed a lawsuit against Kannam and several other defendants on Nov. 24. The lawsuit alleges that Kannam used University financial information to his own benefit and that his involvement with Cross Border Capital Advisors, Belstar Group, and Advanced Device Technology Inc. created a conflict of interest with his position at the University.
“We have no reason to believe that the endowment itself was impacted by any of these things,” Meerts said. “No Wesleyan money was invested in any of these companies.”
Since the dismissal of Kannam on Oct. 13, management of the endowment has fallen to Vice President for Finance and Administration John Meerts, Manager of Financial Reporting Valerie Nye, and Investment Analyst Brett Salafia. This responsibility falls on top of their normal jobs. They are assisted by the 12-member portfolio subcommittee of the Board of Trustees, which is comprised of Board members and alumni with financial expertise.
“I am a caretaker,” Meerts said. “I am not changing things. I am basically continuing the investment strategy that was set before and I am working very closely with the portfolio subcommittee of the Board [of Trustees]. They are really setting the strategy.”
The University is currently undertaking a dual search process to decide how best to replace Kannam’s position. The in-house option would find a new CIO for the University, whereas the outsource option would hire an outside firm to manage the University’s endowment. Meerts reported that the search process began in January and should be completed by the end of March.
“I want the decision to be made by the end of the fiscal year [June 30] because I want someone else in place,” Meerts said. “It may very well be earlier.”
The administration has continued working on strategies to diminish the effects of any economic fluctuations that may occur in the coming months.
“I think that the market conditions are not yet settled,” Meerts said. “I don’t think the economic crisis is over, is behind us, and so I think that it is my job working with all of my colleagues to minimize the impact of whatever may happen over the next six months to the University.”
The University’s endowment has rebounded from its March 2009 low of $442 million, its lowest point since 2003, to start 2010 at $523 million. The endowment began to increase last semester and hit $513 million in September. According to the administration, former Vice President of Investments and Chief Investment Officer (CIO) Thomas Kannam’s alleged breach of contract has had no effect on the endowment.
The University filed a lawsuit against Kannam and several other defendants on Nov. 24. The lawsuit alleges that Kannam used University financial information to his own benefit and that his involvement with Cross Border Capital Advisors, Belstar Group, and Advanced Device Technology Inc. created a conflict of interest with his position at the University.
“We have no reason to believe that the endowment itself was impacted by any of these things,” Meerts said. “No Wesleyan money was invested in any of these companies.”
Since the dismissal of Kannam on Oct. 13, management of the endowment has fallen to Vice President for Finance and Administration John Meerts, Associate Vice President for Finance Nathan Peters, Manager of Financial Reporting Valerie Nye, and Investment Analyst Brett Salafia. This responsibility falls on top of their normal jobs. They are assisted by the 12-member portfolio subcommittee of the Board of Trustees, which is comprised of Board members and alumni with financial expertise.
“I am a caretaker,” Meerts said. “I am not changing things. I am basically continuing the investment strategy that was set before and I am working very closely with the portfolio subcommittee of the Board [of Trustees]. They are really setting the strategy.”
The University is currently undertaking a dual search process to decide how best to replace Kannam’s position. The in-house option would find a new CIO for the University, whereas the outsource option would hire an outside firm to manage the University’s endowment. Meerts reported that the search process began in January and should be completed by the end of March.
“I want the decision to be made by the end of the fiscal year [June 30] because I want someone else in place,” Meerts said. “It may very well be earlier.”
The administration has continued working on strategies to diminish the effects of any economic fluctuations that may occur in the coming months.
“I think that the market conditions are not yet settled,” Meerts said. “I don’t think the economic crisis is over, is behind us, and so I think that it is my job working with all of my colleagues to minimize the impact of whatever may happen over the next six months to the University.”