There’s been a pattern developing over the past three years of the heads of university endowment funds who parted with their schools for the greener-backed pastures of hedge funds. According to Financial News, the trend began in 2003 when Alice Handy left the University of Virginia’s fund to start her own firm that advises endowments. Bob Boldt of the University of Texas Investment Management, John Fehrs of Cornell University and others followed in her footsteps out the door and into hedge fund heaven. The biggest name to make the move recently is Jack Meyer of Harvard Management Co., who launched the Convexity Capital Management, and raised a record amount of money for it. The lure of money is not the only reason they leave. “There is always going to be a tension between academics, who are paid less, and the people who run these endowments,” Karl Sternberg of Oxford Investment Partners told Financial News. Meyer can attest to that; he was called on the carpet by Harvard alumni over the seemingly obscene salaries he paid his staff, and eventually left. The ones who run the endowments, says Sternberg, “see themselves not as functionaries but as people who add a lot of value.” The ones who hire them don’t always see it that way. Take Harvard, for example. After Meyer, whose savvy helped Harvard’s fund earn billions over the years, left, the school hired former Pimco manager Mohamed El-Erian -- but then reportedly went ahead and began outsourcing to external managers, as well, at a price.
