Despite the current shaky economy, at least one team of University investors was able to weather the current market.
The national financial publication Foundation & Endowment Money Management recently awarded the University of Oregon Foundation with the “Mid-size Non-profit of the Year” award for 2007. The editorial staff of the publication chose the organization foundation because of smart investing and its vision to predict the market.
The UO Foundation is a private non-profit corporation that accepts and manages private contributions from donors, said Chief Investment Officer Jay Namyet. The foundation dispenses the money to the University based on donor wishes. The money has been used to pay for endowed faculty members, books in the library and the construction of new buildings on campus, among other things.
The organization manages about $600 million, Namyet said. Much of the money has come from Campaign Oregon, a fundraising effort that started in 2001 and has raised about $736 million.
Namyet recently accepted the award on behalf of the UO Foundation at a San Francisco ceremony hosted by FEMM. The monthly publication, which is read primarily by investment managers, has been giving out the awards for seven years. The awards are based on performance, investment decisions and use of investment managers – all in the past 12 to 18 months.
The award sends an important message to current and potential University donors, Namyet said.
“They know their hard-earned money is being well stewarded,” Namyet said. “While we’re managing the money, they know it’s on its way to ultimately serve for the University’s benefit.”
FEMM Managing Editor Emma Blackwell said the UO Foundation came on her radar when other investors started recommending the publication look into the organization.
“We talked to other people who said, ‘Yeah, you should take a look at these guys,’” Blackwell said. “Sometimes we know people or we’ve written stories about them, but in this case it was based on recommendations and their reputation.”
Blackwell said she credits Namyet for the foundation’s performance.
“When I looked at Jay – given the size of the fund – he actually accomplished a lot and had been really active,” Blackwell said. “He was getting his hands dirty and reacting to the market.”
The UO Foundation was able to predict distress in the markets and was able to predict market movements, Blackwell said.
Back in March 2007, Namyet said he heard the economy being described as a “Goldilocks economy” – a term investors use to describe an economy that isn’t too hot or cold; it’s just right.
“The last time I heard that term was in 1999 – right before the Internet bubble burst,” Namyet said. “That’s usually a warning sign. I knew things weren’t going to get any better.”
Since then, the subprime mortgage industry entered a meltdown, and subprime mortgage lenders have filed for bankruptcy.
Namyet said he remembers long conversations with his investment team.
“We talked about the environment and took some defensive measures to protect our assets,” Namyet said. “I think it’s served us well, given what’s transpired over the last six months.”
Namyet said he credits his team of investors, which is also made up of Laura Chen and Stacy Hunter. The foundation also works with about 45 outside investment managers.
“What we spend a lot of time doing is forward thinking and trying to understand the environment we’re operating in,” said Namyet, who first started as an a proprietary trader for PaineWebber in 1982.
Namyet said the UO Foundation had exposed itself to more than traditional stocks and bonds and has looked for the best opportunities. The foundation returned 19.8 percent for the year ending June 30.
“You’ve heard a zillion times investment managers saying that past performance doesn’t guarantee future success,” Namyet said. “The past is the past, and we’re always looking forward to look for bargains – trying to find the values.”
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