When Adriaan de Mol van Otterloo shuttered his deep value investment firm in 2021 because of a dearth of opportunities that met his criteria, he decided his next step would be to give back.
He returned to his roots: United World Colleges. The global network of schools, which counts among its alumni OpenAI CTO Mira Murati and ex-Standard Charter CEO Peter Sands, recently launched an endowment, of which de mol van Otterloo will be the CIO.
UWC is modeling its tiny endowment of $50 million after Oxford University and Cambridge University, which require each school to opt in to have its assets managed by the endowment. UWC is on track to manage $300 million soon, but has an agressive long-term goal of bringing $2 billion in assets under its purview.
For two decades, UWC has been considering implementing an endowment model to help it preserve and grow its wealth.
“It has been in the cards for us a long time,” said Faith Abiodun, executive director at UWC. “It's a culmination of years of work.” Abiodun noted that de mol van Otterloo’s enthusiasm for the CIO post made it a “no-brainer.”
For its first three years in operation, the endowment’s CIO plans to keep assets in liquid stocks and bonds. Then, he will turn to private markets, working to make the schools comfortable with longer lock-up periods in the interim.
The fund’s new CIO plans to tap the relationships he developed over the past 30 years to gain access to investments that a fund of this size might not normally be able to tap. So far, he says, UWC has invested about 20 percent of its portfolio with managers.
De mol van Otterloo, who spent almost 10 years at Schroders before launching Intrinsic Value Investors, has one analyst on his team, with ambitions to hire six analysts one day. He envisions tapping into the talent developed at UWC, hiring graduates as they matriculate through the program.
“Most important for us is the potential of attracting young people who cannot dream of it themselves,” Abiodun said.
De mol van Otterloo is realistic about his expectations for the endowment’s early years — he’s not expecting to put up huge returns, especially in today’s market, and with the J curve to fight against. Communicating that to stakeholders, though, will be one of his bigger challenges.
“This is the time to invest for the long term,” Abiodun said. “Costs are going up across the board. Inflation is going through the roof. If we don’t do something brave now to put stakes in the ground, we will price out the kinds of young people who come to us for a mission-driven education.”
