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comment by lessismore
lessismore  ·  1009 days ago  ·  link  ·    ·  parent  ·  post: Universities Are Becoming Billion-Dollar Hedge Funds With Schools Attached

This article is confusing. I don't understand the point of the article. :(




mk  ·  1009 days ago  ·  link  ·  

The article is all over the place, but I think the general gist is that hedge funds are too expensive, and part of a financial system that universities should be opposed to. It's lacking data to show that hedge funds have less returns than other vehicles, but this did stick out to me:

    Consider the problem of conflict of interest on endowment boards of both public and private colleges. One 2011 survey showed that 56 percent of endowments allowed board members to do business with the university. In 2013, Dartmouth came under fire when it was revealed that some trustees—including Stephen F. Mandel Jr., who was both chairman of the board of trustees and head of the hedge fund Lone Pine Capital—also managed investments for the school. The trustees were blasted, in a widely cited open letter, for recycling a portion of their “sky high fees” back to the university as “donations” for which they were often rewarded by having a building named in their honor.

This issue alone should be the topic of the article. If board members are profiting from their position to grant contracts, etc., then this is plain old corruption. Of course, the universities might have the right to allow their board members to profit at the university's expense, but I doubt it's a practice that would survive much scrutiny.

kleinbl00  ·  1009 days ago  ·  link  ·  

That's not even what it's saying, though. This is the issue, presented in a sentence structured for adults:

    Stephen Mandel, founder of a hedge fund with 24 billion dollars under management, got a building named after him because he managed Dartmouth's endowment for free.

Fuckin' A. How much did it cost to name a building after him? Zilch. How much did he make them that year? $247 million. I mean, sure. Be outraged. That's your right. But I have no problem with this.

Jeff Selingo, editor of the Chronicle for Higher Education, made the point that really, you should be checking the endowment size of colleges while shopping for schools for your kids. Why? The less money they have, the more they're going to be scrabbling for tuition dollars from over-inflated luxury dorms. The less money they have, the more tuition is going to bobble around based on shortfalls in the state budget. The less money they have, the more likely they are to hire and fire untenured professors and rely on sweatshop TAs to teach your kids. The smart schools started banking their investments and working towards autonomy. Dartmouth? Those horrible pricks that named a building after their hedge fund manager? Gave out $81m in scholarships last year. David Swensen, the Golden God that has been managing Yale's endowment since 1985, has allowed Yale to give out $119m.

Or, you know, you could be like U of Montana, with a whopping $176m endowment, that cut the scholarship of a friend of mine (and 300 of her closest friends) on two weeks notice last month. I guess that's better somehow.

lessismore  ·  1008 days ago  ·  link  ·  

    Fuckin' A. How much did it cost to name a building after him? Zilch. How much did he make them that year? $247 million. I mean, sure. Be outraged. That's your right. But I have no problem with this.

This exactly. What is the difference if he donated $247,000,000 or he made $247,000,000 for the school? The school is better off by $247,000,000 either way. Total non-issue.