Location: Upper Sayles
Time: 4:30 pm
Secretary: Claire Milsted
CRIC minutes for October 29, 2010
Carletonian Article
The issue of the Carletonian containing our article about the CRIC came out today.
Plans and suggestions.
I. Speaker
a. Funding is an issue—we have a small budget but most of it goes to paying for EthVest.
b. We contacted a potential speaker, but the planned subject of his speech was too controversial (the potential use of economic leverage in the Israeli-Palestinian conflict).
II. Presentation to board of trustees
a. We are starting to use EthVest
b. We will begin discussion of our winter presentation to the board of trustees.
Why are we at CRIC?
We went around the room and discussed reasons why we are at the CRIC. Reasons included:
I. Interest in Responsible Investment
a. Personal Interest
b. Responsible Investment’s pertinence to a given field of study
c. Longtime commitment to the CRIC specifically
II. Interest in Carleton
a. Carleton Values
b. Carleton’s financial health
Visit from Jason Matz
Jason Matz, the Chief Investment Officer from the Investment Office, came to our meeting today. He answered questions from CRIC members which covered a variety of issues:
I. Transparency
a. On the one hand, more transparency would allow students to question the decisions of the Investment Office; on the other hand, the Investment Office could probably answer those questions. The important question is “How valuable would this information really be to students?”
b. Carleton discloses more than most schools do—some don’t disclose anything; some merely name who their managers are.
c. Some of our managers are secretive about how they are investing our endowment in order to keep their competitive advantage. For example, mutual funds will often tell you what they have invested in, but with a time-lag. Some managers won’t tell investors anything. Investment information is often proprietary.
II. Role of the Investment Office
a. The Investment Office hires managers; it does not pick individual stocks. It has to be very careful to pick managers who are worth the cost. Often this is difficult to determine.
b. Some of our money is in partnerships; some is in funds.
c. The Investment Office also reviews the Investment Policy every year. Radical changes are rarely made; the thing that gets updated the most frequently is the appendices. The Investment Policy has become more specific of late.
d. The Investment Policy is publicly available
III. Limitations
a. The most important limitation is the issue of custody:
-As mentioned before, the Investment committee does not pick individual stocks. They only make decisions as to whom we hire to manage the endowment.
-When we invest in a fund, the fund manager usually does not give us custody over the assets that our money went to buy. This makes sense from the managers perspective, because it deters short-term investors. We only have custody of about 1/5 of our holdings; those are the holdings on the lists that Fred Rogers gives us.
-However, not having custody of the shares means that we can’t use the shares to influence corporations’ behavior.
b. Attitudes of Managers
-As mentioned before, many managers are secretive about how they invest their money.
-Responsible investment is not something that most managers take into account; risk and return are more important.
-However, there are a few instances where responsible investment issues are also related to return; one example is executive compensation.
c. Divestment
-Generally, we will not divest—it is difficult to decide which corporations are doing more harm and which are doing less.
-There could potentially be an exception for Sudan, because Sudan is such a big issue. However, nothing has come up in our screenings.
-There is often a penalty for divesting from a particular fund.