Henry Walker ’69 sent in these comments on Grinnell’s endowment, in reference to this thread.

This discussion has been interesting to follow. As a Williams Alumnus (class of 1969), I have a strong loyalty to Williams. On the other hand, after my Ph.D. from M.I.T., I came to Grinnell in 1974, and have been here ever since.

Note that the cover story in the April 7, 2006, issue of the Chronicle of Higher Education discusses Grinnell’s endowment. At this writing, there is also a link to this from Grinnell’s home page.

This may clarify some comments made above.

Henry Walker, Williams ’69
Samuel R. and Marie-Louise Rosenthal Professor of Natural Science and
Mathematics, Grinnell College

Thanks! I was especially struck by this section on the growth of Grinnell’s endowment.

The story of Grinnell’s endowment growth begins with Joseph F. Rosenfield, Class of 1925. A college trustee from 1941 until his death in 2000, Mr. Rosenfield was a department-store executive turned investor who occasionally bailed out the college when it was unable to pay its bills and who, along with his friend Warren E. Buffett, helped to guide Grinnell’s investment miracle. (Mr. Buffett, the storied investor, was active on the board from 1968 until 1987.)

Thanks to Mr. Rosenfield — once described by Money magazine as “the best investor you’ve never heard of” — Grinnell was an early investor in a semiconductor company founded by another alumnus, Robert N. Noyce, that would later become Intel. Grinnell also made a splash in 1976 when, at Mr. Buffett’s suggestion, it acquired a commercial television station in Dayton, Ohio, for about $13-million — an unusual investment for a college, particularly at that time — and then sold it, five years later, for $49-million.

Since 1980 the college has had only one fiscal year, 2000, when investment returns declined, and only six other years in which its returns fell below 10 percent. In 15 different years, it had returns of more than 15 percent, and in 12 of those years, its returns exceeded 20 percent.

Grinnell reveals few details about its idiosyncratic approach to investing. David S. Clay, the college’s treasurer, does say that its endowment is probably far less diversified than other colleges’ and far less rigid about asset allocation. He says the institution has succeeded by taking a long-term view, looking for opportunities at low prices, and being willing to allocate big stakes when it found them. Two of its most successful investments have been Freddie Mac and the Sequoia Fund.

What is Grinnell doing? I haven’t a clue, but it sure seems risky. What happens if [when! — ed.] Freddie Mac blows up?

By the way, there is an interesting article to be written about the growth of Williams endowment over this same period. Who will write it?

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