Charles Skorina & Company
● RETAINED EXECUTIVE SEARCH ●
Our clients: visionary families, transformative nonprofits, Wall Street trailblazers
Our vision: build investment preeminence, create opportunities, enrich lives
Our work: provide talent, access, relationships, and insights
LATEST NEWSLETTER
If I thought all I could achieve over the next ten years was 13 percent annual growth I’d junk my company and start over. – Anonymous Founder
Sooner or later most successful businesses lose the founder’s intensity and vision, and attention eventually shifts to the mundane business of making money.
Founders grows old, the heirs lose interest, marriage, divorce, and death intervene and before they know it all that’s left are trusts, dividends, and decline.
It doesn’t have to be that way. Some families stay on top for centuries. A Bank of Italy study a few years back found that many wealthy Florentine families have stayed wealthy for 600 years.
And a recent IMF paper concludes that “for given portfolio allocation, individuals who are wealthier are more likely to get higher risk-adjusted returns” and “high returns both bring individuals to the top of the wealth scale and prevent them from leaving it.”
Education, culture, and entrepreneurial talent all play a part and an internal investment office for UHNW families may help promote generational alignment and cohesion.
As professor Mandy Tham at the Singapore Management University writes, a constructive family office can serve as a forum where the generations can negotiate and agree on investment goals and legacy.
But building a family investment office to last is not easy. Too many family heads confront what Noam Wasserman, professor, author, and dean of Yeshiva University’s Sy Syms School of Business calls the founder’s dilemma.
Founders who want to manage empires will not believe they are successes if they lose control, even if they end up rich. Conversely, founders who understand that their goal is to amass wealth will not view themselves as failures when they step down from the top job.
Family office confidential
What some founders and CIOs really think about building and running an investment office.
A family office investment operation will never earn as much as the family business, so why have one?
The business of money management is all about risk mitigation and wealth preservation and first-gen founders aren’t usually built that way.
A notably successful individual had this to say after we showed him our latest 10-year Endowment Performance Rankings a few weeks ago.
Keep in mind that these are terrific returns for diversified, multi-asset, global portfolios and these CIOs are the best in the business.
Bowdoin and former CIO Paula Volent topped the charts with a 13.3 percent return, MIT and Seth Alexander finished a hair’s breadth behind at 13.02, Brown and Jane Dietze ranked third with 12.3, and Princeton and Andy Golden fourth at 12.2.
After studying our rankings and returns, he paused for a moment and then said “Charles, if I thought all I could achieve over the next ten years was 13 percent annual growth I’d junk my company and start over.”
[The average return by the way, for our pool of one-hundred endowments over one billion dollars AUM, was 9.2 percent with a mean of 9 percent.]
I don’t want a chief investment officer looking over my shoulder.
Jon Hirtle, co-founder of Hirtle Callaghan, has been managing family and institutional money for almost forty years.
We asked him why successful founders don’t always see eye to eye with endowment style chief investment officers and here’s his reply.
Read More »NEWS AND COMMENTARY
ABOUT
Edgar Smith, first CIO at Directors Guild of America, Los Angeles
10yrs USC, 3yrs Archstone, 5yrs PAAMCO, 3yrs JPM, MBA, Columbia, BA, Yale
Pasy Wang, first CIO at Cedars-Sinai, Los Angeles
Sonali Dalal, inaugural CIO University of St. Thomas, MN
19yrs Penn State, 5yrs Export Import Bank India, MBA, Penn State, BA, Bombay University
Angela Miller-May, new CIO at Illinois Municipal Retirement Fund (IMRF)
11yrs Chicago Teachers’ Pension, 13 yrs Fiserv, MBA, DePaul, BA Northwestern
SKORINA IN THE NEWS
9-2-21 Forbes: Insiders say Yale missed an opportunity to add diversity to its iconic $31bn endowment.
9-1-21 Institutional Investor: How to Reach the Allocator C-Suite.
5-7-21 BloombergNews: Yale Names Alex Banker Interim Endowment Chief, Plans Search
5-6-21 The New York Times: David Swensen, Who Revolutionized Endowment Investing, Dies at 67
5-6-21 Forbes: Yale Endowment Chief David Swensen Leaves Legacy of Top College Investment Leaders
CHARLES A. SKORINA & COMPANY works with leaders of Endowments, Foundations, and Institutional Asset Managers to recruit Board Members, Executives Officers, Chief Investment Officers and Fund Managers.
Mr. Skorina also publishes THE SKORINA LETTER, a widely-read professional publication providing news, research and analysis on institutional asset managers and tax-exempt funds.
Our Practice:
• We recruit Board Members and Executive Officers, Chief Investment Officers and Senior Asset Managers.
• Our research and analytics are backed by over thirty years of hands-on recruiting experience and an unrivaled personal network.
• We collect performance, compensation, and background data on most senior institutional investment professionals in the U.S. and the funds they manage. We analyze that data to construct profiles of those managers and their funds, identify best-in-class people, and map their career trajectories.
• We share our research and insights in a widely-read professional newsletter – THE SKORINA LETTER – and website – www.charlesskorina.com.
• The New York Times, Wall Street Journal, Bloomberg, Thompson Reuters, Financial Times (Fundfire), Institutional Investor, Pensions & Investments, Private Equity International, and the institutional investment community use our research and analysis. Skorina has been interviewed on chief investment officer compensation issues on Bloomberg TV.
• Our work is regularly re-printed in Allaboutalpha.com and other industry magazines, blogs, and third- party web postings.
• We focus specifically and effectively on the world we know: Board members and Executive Officers, Chief Investment Officers, and Senior Asset Managers at institutional investment firms and funds – including sovereign wealth funds, endowments, foundations, pension funds, banks, investment banks, outsourced chief investment officer firms (OCIO), and sell-side money managers.
Prior to founding CASCo, Mr. Skorina worked for JP MorganChase in New York City and Chicago and for Ernst & Young in Washington, D.C.
Mr. Skorina graduated from Culver Academies, attended Michigan State University and The Middlebury Institute of International Studies at Monterey where he graduated with a BA, and earned a MBA in Finance from the University of Chicago. He served in the US Army as a Russian Linguist stationed in Japan.
Charles A. Skorina & Co. is based in Tucson, Arizona.
Endowment Investment Performance 2022: A Cautionary Tale
Know what you own, and know why you own it — Peter Lynch
These are “interesting times” for institutional investors. Covid and a market crash in 2020, stimulus frenzy and valuation-highs in 2021, war and the end of free money in 2022. Whew.
But despite the volatility, there’s nothing like a decade’s long bull market to fatten school coffers. Just about every endowment on balance is better off than it was a decade ago, as our ten-year return numbers show.
NACUBO and TIAA will have more to say on the matter in their online session this Thursday February 23rd at 2-3:30 ET as they showcase their annual semi-official endowment league tables.
We recruit chief investment officers and finance professionals for families and institutions, so our 2022 endowment performance tables focus on the individuals who manage the money.
Endowment investment heads are the ultimate long-term, strategic investors. They have an infinite investment horizon, a global playing field, and can invest in anything anywhere – within the broad policy limits set by their institution. Their performance is a bellwether for what’s prudent and possible.
We don’t mean to slight the thousands of bright, creative, and top-performing investment professionals at foundations, family offices, and Wall Street firms, but it’s difficult to extract meaningful data on compensation or performance from opaque sources. So, we go with what we can get.
In this report, we feature ten-year fiscal year-end 2022 investment returns for one hundred twenty-eight US and six Canadian institutions — the latest available.
We consider a ten-year span to be a rigorous and revealing measure of the strength of an institution’s oversight and long-term investment abilities, but we remind our readers that there’s much more to the story.
First the caveats
Keep in mind that the job of every CIO and investment staffer is to meet the objectives set by their board, not to beat Yale.
Every school has its own endowment payout rate and tolerance for risk and that’s what CIOs aim for. Some schools rely heavily on income, others place more weight on growing the principal.
We all love the league tables (well, most of us) but board members and administrators set the parameters for investment execution, and they are the ones to judge whether their goals are met.
Next. There is no one reporting standard for endowment performance and no institutional body to enforce a standard even if there was one.
Many schools report their numbers net of all costs including external management fees, internal office costs, and the endowment tax, but not all. Some report gross returns. Others subtract external management fees but not office costs or the endowment tax. Over a ten-year period that makes a difference.
Third,
Read More »