<p>Considering that the it has billion dollars AUM and run pretty lean at 15 or so investment staff, they can afford to shell out more to hire better people. Searched linkedin for some of the investment analysts…pretty underwhelming…</p>
<p>Bearcats, even with a huge fund, as a public institution, Michigan cannot compensate and incent employees the way a private investment institution would. That being said, Michigan’s endowment is growing nicely by university standards.</p>
<p>HAHA Erik Lundberg, Michigan’s Chief Investment Officer, got a BBA from Wisconsin and an MBA from The Ohio State University. You would think Michigan could hire a Harvard grad or something and not from their rival school.</p>
<p>I certainly wouldn’t want any of them replaced. They are doing one hell of a job. In fact, when you look at other private universities such as Duke and Harvard, Michigan has been vastly outperforming them for years. The fact of the matter is that Michigan has an outstanding financial team that obviously knows what they’re doing.</p>
<p>goldenboy8784,
You are mistaken, no school can teach you how to trade. If you can achieve the desired results your education means nothing. Just because you have a degree from Harvard on the wall does not mean that your investments will out preform someone from a state school.</p>
<p>goldenboy8784, are you implying that he’s less-worthy, maybe perhaps incompetent, simply because he has degrees from Wisconsin and OSU but not harvard? You need to grow up dude.</p>
<p>Really sickens me that people tend to think that the name on their diploma defines their skill set/achievements. goldenboy, you’re going to have serious issues working under someone who didn’t go to a top 15 school. And you’ll probably refuse to take orders from an American University grad on your first day of work because someone so unworthy doesn’t have the right to order a top 15 kid around.</p>
<p>Plus, Michigan is mature enough to not let petty sports rivalry get in the way.</p>
<p>Ironically, Michigan’s endowment has outperformed Duke’s for the last 4 years. No endowment in the nation has grown as much as Michigan’s in the last 10, 20 or 30 years.</p>
<p>Dartmouth’s previous president from 1998-2009, James Wright, is a Wisconsin alumn. Wisconsin is a pillar of American education. It was one of the twelve founding members of the AAU back in 1900, an exclusive group that included Cal, Chicago, Columbia, Cornell, Harvard, Johns Hopkins, Michigan, Penn, Princeton, Stanford and Yale. Not bad company!</p>
<p>As for Michigan, the University has produced two MIT and four Cornell presidents.</p>
<p>At any rate, it does not matter where Michigan’s investment officers went to college, what matters is how well the fund has done.</p>
<p>“You would think Michigan could hire a Harvard grad or something and not from their rival school.”</p>
<p>Unlike it seems with most Buckeye fans, Michigan is NOT completely obsessed with it’s main sports rival. To be honest, I wish it were a Duke alumnus who would have been hired so you would have something nice to say about the university. Then again, perhaps there wasn’t anyone qualified who graduated from there.</p>
<p>God, some of these young folks are so stupid about reality it hurts. Maybe if some more sane state school grads had been running Wall Street we would not have become such a huge debtor nation. Wisconsin’s finance philosophy is long-term value and growth. It has produced an outsized number of sucessful fund managers. No, not the sexy fast buck artists of private equity. Good old investing.</p>
<p>According to Morningstar data, the University of Wisconsin-Madison’s graduate program ranked #6 in placement of investment professionals at Morningstar rated funds. This is evidence of the school’s long and rich tradition of training investment managers.</p>
<p>Graduate Degrees of Investment Professionals at Morningstar Ranked Funds
Rank Count Graduate Studies Index
1 1 University of Pennsylvania - Wharton School 100
2 2 Harvard Business School 46
3 3 New York University - Stern School of Business 45
4 4 University of Chicago Graduate School of Business 40
5 5 Columbia Business School 35
6 6 University of Wisconsin - Madison 31
7 7 University of California at Los Angeles - Anderson School of Business 20
7 8 Stanford Graduate School of Business 20
9 9 Northwestern University - Kellogg Graduate School of Business 18
10 10 University of Virginia - Darden School of Management 17
11 11 University of Southern California 15
12 12 University of Michigan School of Business 12
12 13 Cornell University - Johnson Graduate School of Management 12
12 14 Indiana University 12
15 15 Dartmouth College - Amos Tuck School of Business 11
15 16 MIT Sloan School of Management 11
15 17 Oxford University 11
18 18 University of California at Berkeley Haas School of Business 9
18 19 Carnegie Mellon University 9
18 20 Duke University - Fuqua School 9
18 21 Cambridge University 9
18 22 University of Texas at Austin 9
23 23 University of Minnesota 8
24 24 University of Connecticut 7
24 25 Case Western Reserve University 7
Example: For every 100 investment managers that earned their graduate degrees from Wharton, 31 earned their degrees from UW-Madison.</p>
<p>Harlan H. Hatcher<a href=“8th%20President%20of%20the%20University%20of%20Michigan%20from%201951%20to%201967”>I</a>*, Harlan Henthorne Hatcher was born on September 9, 1898, in Ironton, Ohio. He received B.A., M.A. and Ph.D. from The Ohio State University. Author of The Buckeye Country: A Pageant of Ohio & The Ohio Guide (1940, editor) :D</p>
The so-called track record has nothing to do with the analysts. Even up till a couple years ago, Michigan endowment was really run by a few people, they started hiring investment analysts a couple years back.
Just because a fund returned more overtime doesn’t mean it outperforms another endowment fund. Performance is not measured by return, but by the return generated from a risk profile. Any investment professional knows that. A return number, however pretty it is, means nothing without risk metrics like predicted tracking error or realized volatility over time.
I was talking about analyst quality not judging simply by school, but what they were doing prior. Someone who graduated from EMU who was a career backoffice operations person/accountant prior to joining the investment office has underwhelming qualification, regardless of how you cut it.
The compensation at the top is plenty fine. 500k for a PM for a fund of funds is more than generous. He’s not a real PM anyway in the sense that he doesnt really run the investment, he just allocates money. The investment risk director is underpaid for the position, but then with her qualification (legal counsel) prior, she got a good enough deal. But paying 50k -66k for investment analyst with several years of experience is inexcusable. Good talent, even at entry level, make much more than that. It basically dooms the investment office to mediocre talent going forward. Anyway I just thought the comp numbers were very low and thought it was interesting, and then dukeboy turned this into a shytshow.</p>
<p>Actually, he also had worked for Michigan through the period of most heated rivalry between the two schools in terms of football (aka. Snow Bowl of 1950). H3 was not only an Ohioan, but an avid buckeye fan, an admirer of coach Hayes (tOSU coach from 1951 to 1978), and would always greet Woody and his visiting team at the Big House locker room according to the ‘Encyclopedia of Ohio State Sports.’ He was also the former dean of my college (arts and sciences) who then became the Vice President of tOSU and was destined to become the President of TOSU. However, an Adm team of Michigan academe secretly recruited him in a secluded downtown Columbus Hotel based on ‘Toledo Blade’ news archive, and the rest was history. H3 was so loved by Michigan students and alum-alike, as a result, Michigan’s Graduate Library was named after him as well as the most prominent landmark on Diag - the bronze inlaid of ‘Block-M’ were a gift to him as a perpetual testimony for his contributions to Michigan.</p>
<p>P.S. H3 was also a close friend to Brady Hoke’s father who had played for Woody Hayes. His legacy still lives in A2 today through his son and daughter who currently hold high positions at U of M.</p>
<p>*This post also serves as a response to an ignorant poster ‘m1817’ who had mocked the buckeyes at another thread here on Michigan board. Respect.</p>
<p>bearcats, your analysis is excellent. I was wondering if this sort of hiring and compensation practices were restricted to Michigan or present at most other universities. I think the problem may have more to do with the fact that non-profit organizations face an uphill battle in the recruitment game.</p>
<p>Please show any evidence that grads of certain schools or those paid more actually outperform others over the long term. Very very few beat the market long term. Most get beat sooner or later no matter what the pay==or they cheat. After setting the risk profile you want overall in your asset allocation the rest is pretty basic. Pay the head coach a nice amount and find people who can execute the basic strategy. They need not be that expensive. Many are happy to stay in U towns for less money and pressure and more pleasant colleagues.</p>
<p>"In comparison to OSUs 13 employees who made more than $1 million in 2011, according to payroll data from the University of Texas, three of their employees broke $1 million. At OSU, there were 238 employees who made more than $300,000 in 2011, while at UT, there were 34.</p>
<p>Vedder said other institutions do not have payrolls as large as OSU."</p>