One sentence in Abigail Wattley’s ’05 op-ed in the Record has generated some confusion.

We don’t disclose the list of our fund managers because of agreements we have entered that relate to confidentiality.

Unsophisticated readers might assume that Wattley meant, “Our managers require us to not reveal that we have invested in them, otherwise they would not want to do business with us.” That is, the managers insist on confidentiality and there is nothing the College can do.

This is absurd, at least for 95%+ of the managers the College invests with. If Williams asked them for permission to reveal their name on a list of all its managers, the vast majority of investment managers would say:

1) “Williams is the client! If Williams wants to include us on a list of managers, that is its right. Indeed, many of our investors, especially state pension funds like Texas Teachers, are required by law to reveal all their managers and even our fees!” See below (pdf) for an extract:

texas_teachers

Indeed, many (most?) of Williams managers are publicly identified by at least some of their clients.

2) “We hope that Williams reveals our name (if not our fees and performance)! Having smart, sophisticated endowments invest with us is great advertising! The more people that know that Williams trusts us, the more money we are likely to be able to raise.”

The easiest way to see that Williams could easily make its list of managers public is to take note of other institutions that do so. (Previous discussion here.) Consider the listing provided by The Boston Foundation (tBf):

tbf

If The Boston Foundation can provide a listing of its managers, then why can’t Williams? Note, also, that these managers are some of the most elite and sought after in the business. Some (Baupost?) are probably even closed to new investors. And yet they have no problem with tBf making their status public.

Should we expect members of the Williams Investment Office (like Wattley) and the Williams trustees to know about the practices of places like The Boston Foundation? Well, in addition to being a similar sized endowment in the same city, The Boston Foundation has a CEO (Paul Grogan ’72) and a board chair (Michael Keating ’62) who are both former trustees at Williams!

Not enough evidence? Consider the comments of Churchill Franklin, CEO of Acadian Asset Management and former chair of the board of trustees at Middlebury.

You are right (as usual) the answer is no we [Acadian] don’t care and are happy to have the advertising. Some fund of funds and outsourced CIOs are reluctant to share the names of the managers they select, because that is their “edge” and their value-add. Huge funds are sometimes reluctant to share the names of their managers if they are trying to protect limited capacity, but the managers are almost always happy to have their names shared.

I could produce similar quotes from Ephs in money management if I thought doing so wasn’t a huge waste of their time.

Is there any way that Wattley isn’t lying? The naive among you might guess that, perhaps, for historical reasons (or because our lawyers are stupid), there are stipulations in every investment contract along the lines of: “Williams agrees to never publicly reveal the name of the investment manager.”

But, if that were so, then how could I possibly know that all of these firms (pdf and pdf) have managed money for Williams in the last few years?

hintz

spo

summit

charles bank

If the College really had “agreements … that relate to confidentiality” and which prevented the College from reporting that its managers included SPO, Summit, William Blair, Charlesbank and so on, then how do I know about these managers?

The cynic in me is afraid that Wattley is purposely trying to mislead the Williams community. She (or her boss Collete Chilton . . . or her boss’s boss) don’t want other Ephs to know who we invest in. Of course, they don’t want to lie too obviously. They just want to string together a bunch of mostly-true-individually but misleading-in-the-aggregate sentences that give everyone the impression that the College’s hands are tied.

Other explanations?

If the Record were a better paper, it would find out the truth. Start by asking for some example language from one of these “agreements” about the required “confidentiality,” perhaps from one of the firms that are already public.

In fact, why not start with Charlesbank! It is perfect. First, it happily allows some of its clients, like The Boston Foundation, to report its involvement. Second, Williams already reports an investment. Third, a (the?) senior member of Charlesbank is Michael Eisenson, chair of the Williams Trustees, and Abigail Wattley’s boss’s boss.

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