Author Jay Yoder, who as director of investments nicely boosted the endowments of Smith and Vassar colleges over the past decade, doesn't mince words when offering advice to academic institutions that still try to manage money by consensus: Get help now.
"The old way of doing business doesn't work, hasn't worked and has been abandoned by most large, sophisticated, successful endowments," says Yoder, 44, whose forthcoming book, Endowment Management: A Practical Guide, will be published in June by the Association of Governing Boards of Universities and Colleges.
Yoder ran Smith's $915 million endowment for nearly four years and Vassar's for almost seven, significantly increasing their allocations to alternative investments. Any school that can afford a CIO needs one, he says, but most cringe at the thought of paying for a professional investment manager. And those that do hire a CIO typically wait until they reach $600 million to $700 million in assets. That's far too long, argues Yoder, who sees $150 million as a better benchmark and contends that the cost of paying a CIO is worth the performance boost it brings.
The new book will be Yoder's last piece of peer advice for a while: After some careful cost-benefit analysis, he has decided to leave the not-for-profit academic world. He and a team of investment professionals have just launched Tuckerbrook Alternative Investments, a Boston asset management firm whose first product will be a long-short equity hedge fund. "It was just too good an opportunity to pass up," Yoder says of his new job as Tuckerbrook's CIO.