Louisiana State University has outsourced the investment
management of its $454 million in endowed assets to Cambridge
Associates, a big win for the advisory firm that culminated
Cambridge now manages the entire endowment portfolio after
the university began transitioning the investment management
role to the firm about a year ago, according to LSU
spokesperson Sara Whittaker.
In July 2016, the Baton Rouge-based foundation began a
partially outsourced chief investment officer partnership with
Cambridge Associates, according to its 2016 investment
report. The investment committee and then chief investment
officer, George Moss, were to work closely with the
firm and maintain high-level oversight of the endowed
portfolios, LSUs foundation said in the report.
For Cambridge Associates, its a major win in a
ferociously competitive and expanding outsourced CIO market.
The CIO position no longer exists at the LSU Foundation,
ceasing with Mosss exit in December 2016, five months
after Cambridge came aboard.
Moss, who subsequently spent three months at the University
of Wisconsin Foundation as senior director of fixed income,
deferred comment to LSU.
George was a one-man shop here, Whittaker said
in an email. We recruited for a replacement to assume his
responsibilities, in a new role of director of investments;
Alex McDermott was hired several months ago and is part of our
CFOs team, with a focus on non-endowed
LSU had about $140 million of non-endowed assets,
such as working capital and investment income, at the end of
June, according to the spokesperson.
Endowments and foundations accounted for about half of
Cambridges 1,115 clients at the end of 2016, a presentation from the advisory firm
shows. Cambridge provides guidance on the vast majority of its
clients assets, as opposed to managing their investments.
The investment management business is more lucrative and most
traditional consulting firms have followed
Cambridge into the outsourced-CIO industry.
[II Deep Dive: Fear and Loathing in the Outsourced CIO
A Cambridge spokesperson did not immediately provide comment
on the LSU endowment, which has yet to release its fiscal 2017
The university's general endowment fund underperformed its
U.S. peer group in recent years, according to NACUBO-Commonfund
data on endowments between $101 million and $500 million. LSU
lost 4.66 percent in fiscal 2016, exceeding the average 2.4
percent loss posted by its peers. LSUs annualized 1.96
percent return in the three years through June 30, 2016 lagged
by nearly 300 basis points, while its 2.79 percent gain over
five years trailed the average 5.1 percent return produced by
(This story was updated to provide the latest amount of LSU's
endowed and non-endowed assets.)