University Of Cambridge Has Enough Money

The school can be a bit more choosy about its investments now.

Does it look like we need any more fucking money?

So now this is happening:

A spokesman for the University of Cambridge said the institution’s council Monday established a working group, including three students, to devise rules meant to ensure that investments made by the endowment—the biggest of any university in Europe—are socially responsible. The school’s total endowment, including the investments of Cambridge’s independent colleges, is valued at £5 billion ($7.86 billion). The new guidelines will apply to a portion equal to half that amount.

Not everyone is applauding the move:

Ethical investing has detractors. The history of such “vanity investing” is “littered with disasters,” said Jon Entine, a visiting fellow at the American Enterprise Institute and a former adviser to the Bill & Melinda Gates Foundation. “If you believe social responsibility is to adopt a cause and disproportionately put money into an investment area supporting that cause, it’s going to be a lose-lose situation because you’re not making sober financial decisions,” he said.

Cambridge University to Adopt Ethical Approach to Multibillion-Dollar Fund [WSJ]


Asian Clients Take Novel Approach Of Expecting Private Bankers To Make Money For Them

The Journal this morning has a sort of funny article whose gist is basically that Asia's new-money millionaires want actual performance from their private wealth managers and do unsporting things like split money among managers, demand products that offer impressive returns, and move money from managers who do a bad job to those who do a good job. You will not be surprised to learn that the bankers take kind of a dim view of this: While clients in the West want to increase their wealth, they also are concerned with keeping what they have by sticking to conservative investments, and focusing on estate- and tax-planning strategies. In Asia, clients also tend to be first generation rich, who want to make more money, rather than preserve it. They seek, as one banker said, "private brokers not private bankers." ... "I have one client who now has more than 10 private bankers, saying he doesn't want to depend on any one bank and risk his assets," said Kenny Lam, McKinsey's head of Asia private banking. "Asian clients are more interested in the next hot product rather than preserving wealth and are more likely to switch to the next banker with a better investment idea." Two and a half years ago the Journal ran what strikes me as a companion piece, about accumulators, which are an equity derivatives trade that banks sold mainly to Asian private-wealth clients and which revel in the nickname "I-kill-you-laters" because they do, and in 2008 they did. You can if you like connect the stories pretty effortlessly: Asian PWM clients demanded too-good-to-be-true returns, so banks happily obliged by selling them products with returns that were in fact too good to be true. And now they are demanding too-good-to-be-true returns and some banks are complaining because they can only offer mediocre-but-true returns, but others are probably just cooking up the next generation of delayed-death too-good-to-be-true products and not telling the Journal about it. Circle of life.