Cornell Endowment Rocked by Another Resignation

(June 21, 2011) – Only months after the chief investment officer of Cornell University’s $5.3 billion endowment abruptly resigned, another senior investment official has announced his resignation.

Senior investment officer John Regan, who oversaw the endowment’s hedge funds and equity portfolio, will leave Cornell to start his own asset management firm.

“It’s just a case of bad timing; this is something that anyone would leave most jobs to go do,” Regan told the Cornell Daily Sun, the university’s newspaper. “The timing for us is now and the opportunity is not going to be there in a year.”

Regan’s announcement comes in the wake of chief investment officer Michael Abbott’s sudden resignation in early May. The exact reasons for the departure remain unclear and Cornell refused to elaborate on the reasons for Abbott’s exit.

“It has become apparent that [Abbott’s] style of conducting business is inconsistent with Cornell’s policies and expectations,” Vice President for University Communications Tommy Bruce told the Cornell Daily Sun on May 2. “The parties concluded that it would be in everyone’s interest to end the relationship.”

Endowments are increasingly finding it difficult to retain top investment talent. After the 2008 stock market collapse, endowments across the United States saw unprecedented levels of turnover, aiCIO has reported.

“There is not necessarily one pure reason” for why endowments are having trouble retaining top managers, Associate Principal Renee Neri of executive recruitment firm Heidrick & Struggles International told aiCIO. Some of the turnover can be attributed to entrepreneurial outsourcing opportunities. However, more often, the principal source of contention, she said, is that outside managers can experience a “rude awakening” when they encounter what are often “cumbersome organizational structures” or “ governance structures that could be perceived as bureaucratic.”

Stanford University revealed June 20 that its chief investment officer, Ken Frier, had also suddenly left the endowment after less than a year. The University of Florida, Dartmouth College, Brandeis University, New York University, and Wesleyan University, among others, all had to replace their chief investment officers in the aftermath of the 2008 market crash. Cornell’s former chief investment officer Michael Abbott himself had only served Cornell for about a year after his predecessor, James Walsh, left the endowment in 2010.