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Divestment has become a flash point for many institutional investors, and particularly those at college endowments.
Student demands haven’t exactly been met with open arms. The public-facing posture of these endowments naturally tends towards secrecy, since the private funds they invest in often restrict what can be shared about their holdings.
That can invite some hilarious comparisons. In this episode, Ashby makes the point that while he was doing some of his early research into Sovereign Wealth Funds about fifteen years ago, the Iranian Oil Stabilization fund was much more transparent about its holdings than the endowment of his alma mater Princeton University.
But there’s a fine line between that and calling the cops on students, which happened at Columbia University this past May.
After the Acrimony
In this Episode, Ashby and I were joined by Kelly Grotke, a founder of the Pattern Recognition Research Collaborative who has not only written about this debate, and has been involved with student groups at Oberlin, her own alma mater, and elsewhere.
Her take on the broader issue is refreshing and, to my eye, useful. In our interview, she suggests that whatever one’s position is on whether divestments are worth pursuing, the broader debate offers a “really really good and valuable opportunity for a greater understanding of the role of finance in society.”
She appreciates that the financial strength these endowments provide their institutions is a key enabler of their long-term health, but is also quick to remind us that the health of the institution also has to do with its character.
After all: “What are students going to universities for? To learn things, to have discussions, to engage with interesting issues,” she says. I couldn’t agree more. And I hope that, as you formulate your own response to these thorny issues, that this episode gives you some useful inspiration.
Additional Resources
These many be helpful things to look into after you listen to this episode:
The Failure of Financialized Higher Ed - A piece from Kelly in The American Prospect on how financialization has changed universities.
What I’d Tell Your Chief Investment Officer about Divestment - A piece from Ethical Capital outlining constructive steps investment offices can take on this issue. See also: Don’t Stop With Divestment.
Identity: The Ultimate Driver of Investor Returns - A piece Ashby published last year arguing that the organizational capacities of an investor are the most important driver of their long-term returns.
Divestment Without Dissonance