Cambridge takes stock of finances

January 13, 2006

Cambridge University has set up its first investment board and is set to appoint a chief investment officer in an effort to professionalise the management of its endowments more in line with US universities.

The board, which was announced this week, includes David Swensen, chief investment officer at Yale University, where Cambridge vice-chancellor Alison Richard was provost.

At Yale, Mr Swensen produced annual returns on investments of 17.4 per cent over ten years, placing it in the top 1 per cent of American institutional funds.

Cambridge's investment performance places it in the top 15 per cent of UK charitable funds. Its endowments and investment assets stand at more than £1 billion.

Mike Smithson, director of development at York University who has held similar posts at both Oxford and Cambridge, said: "The influx of more professional expertise could make a significant difference to university finances.

"If donors know that the university is maximising its returns they are also more likely to give generously."

The creation of the board comes just three months after the university launched an ambitious fundraising campaign to raise £1 billion to celebrate its 800th anniversary in 2009.

Professor Richard said: "Cambridge's benefactors must be confident that gifts to the endowment will be managed according to global best practice."

Michael Dobson, chief executive of Schroders plc, is to chair the board.

Oxford University is also reviewing how it invests its funds. Sir Alan Budd, a former member of the Bank of England's monetary policy committee and now provost of Queen's College, is heading the review.

* King's College, Cambridge, faces a bill of almost £1 million relating to the departure of its provost and former bursar.

It is understood that King's has agreed to pay Dame Judith Mayhew-Jonas, formerly the City of London's top administrator, more than £700,000 after she decided to step down last year, two years into a ten-year term.

Roger Salmon was suspended as bursar on November 10, 2003, just weeks after Dame Judith arrived. He reached a legal agreement with the college in July 2004 and was paid a six-figure sum.

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