Left-Wing Investment Advisors Use Your Funds to Attack Your Views

Major universities have endowments in the tens of billions of dollars. These endowments come from a variety of sources including taxpayer funds (for state sponsored universities), alumni gifts, foundation gifts, earnings generated from intellectual property royalties and other sources.

Of course, the endowment funds are invested in stocks, bonds, real estate and other assets, which produce income in the form of interest, dividends, rents and capital gains. That income is added to the endowment. The entire endowment grows tax free, which makes these university funds among the largest investment pools in the world.

While endowments are supervised by boards (usually appointed from among benefactors and political cronies) the actual management of the funds is handled by outside investment advisors. Given the size of these funds, the tax-free compounding and the limited oversight, university endowments are among the most attractive clients for these investment advisors. Even a flat 1% management fee could produce $30 million per year in fees to investment advisors on a $3 billion fund.

With all of that at stake, one might assume that the investment policies would be somewhat aligned with the values of the university or at least not directly adverse to those values. That assumption is wrong.

A recent study shows that investment managers including JPMorgan Asset Management that manage funds for the University of Texas (UT) and Texas A&M University (Texas A&M) consistently voted their endowment shares in favor of ESG measures (Environment, Social and Governance proposals that support left-wing ideologies and participate in the global climate hoax). Oil and natural gas are a large part of the Texas economy and those industries attract many graduates of UT and Texas A&M. Yet JP Morgan and other advisors supported resolutions at investee companies that attacked the oil and gas industry.

Other measures adverse to the universities’ best interests included those favoring gun control and others that defunded businesses of conservative figures. Supporting those resolutions appears to violate endowment guidelines that prohibit voting shares for measures that “advance social and political agendas.”

Fortunately, efforts are underway in Texas and other states to require investment managers to avoid political activism, support the universities’ interests and to fire those managers who do not adhere to those investment guidelines. That’s progress.

Before investing in any large fund, you should look at the prospectus, identify the investment managers and see if they’re supporting the ESG movement. Apart from lower returns (studies have shown that ESG funds underperform) they could be acting adverse to your own views and interests.

Corporate leaders and institutional fiduciaries looking to incorporate state of the art predictive analytics to their risk mitigation and strategic analysis should click the link to learn more about Raven Predictive Analytics®.