The Outstanding Brown CIO

Jane Dietze

Chief Investment Officer
Brown University

The Outstanding Brown CIO: Jane Dietze

In the past two years, the investment chief has steered the endowment to double-digit returns, as well as outperformed peers and benchmarks.

What is Jane Dietze getting right? 

Since taking over as investment chief at Brown University in 2018, Dietze has attracted more and more attention from allocators wondering how she has snagged the most enviable returns among the Ivy League endowments. 

In the most recent fiscal year ending in June, the university endowment jumped to $4.7 billion in assets with a 12.1% gain that outperformed not only the 8.8% returned by a US benchmark, but the 7.6% achieved by its closest Ivy League competitor, Dartmouth. Meanwhile, Cornell came in last among its peers with a meager 1.9%. 

It’s not the first time the school has led the league in returns. While other university endowments have struggled to outperform a simple 60/40 benchmark portfolio, Brown has led the pack for the second year in a row. It’s returned more than 12% for four consecutive years, with more than 10% annualized over the past decade, during a time when investors are wondering whether the endowment model is dead. 

While the university has stayed mum on its strategies, analysts have noted that the endowment’s success might have to do with its technology allocation, which has nearly doubled in the past three years, a recent Markov Processes International report estimated. While the S&P 500 Information Technology Index jumped 35.9% in fiscal year 2020, broader benchmarks for private equity and venture capital, such as the Cambridge Associates indexes, were up 9% and 11.8%, respectively. 

It’s a strategy that would play to the CIO’s strengths. Dietze, who has a background in venture capital and entrepreneurship, was previously general partner at early-stage venture capital fund NextPoint Partners and information technology and communications firm Columbia Capital. Before joining Brown in 2013, she was the director of private equity at Bowdoin College. 

Another explanation is be the one oft-cited by Dietze and her team: a phenomenal group of external managers selected to generate stellar results in the middle of last year’s recession. 

“This has been a year filled with unique challenges for Brown and for communities across higher education,” Dietze said in a statement in June. “We’re grateful to an outstanding group of external investment managers who collectively have exercised measured judgment in the face of historic volatility in the financial markets.”

A third notable tactic? The Brown investment team does not rebalance its portfolios as much as other endowments, according to Michael Markov, chairman and CEO at Markov Processes International, an independent provider of analytical tools and software solutions. This allows a segment of the university’s portfolios to grow organically, but it’s a strategy that can prove risky if investments start to lose value all at once. 

What is clear from the wide dispersion of Ivy League results in recent years is that the alternatives-heavy endowment model is not dead. It simply requires a lot of skill. That’s something Dietze and her investment team, who have grown the $4.7 billion portfolio by $1 billion in assets in two short years, seem to clearly have. 

“It seems like it’s working really well,” Markov said.

Sarah Min