‘Head coach’ should lead UI Foundation

By Thomas A. Wolf

Congratulations, Hawkeye Nation, on an incredible football season capped off with a dominant Orange Bowl victory!

I assume like many alums and fans it gave me pause to assess the basis of my pride in my alma mater. I reflected on dedicated faculty, the idyllic campus, and the hearty sports teams that deserve high praise.

But then, because of my profession and my hopes for Iowa, I could not help but consider the University of Iowa Foundation, whose investment management is not praiseworthy and needs immediate attention.

Please allow me to expose the issue and define a solution, in hopes of seizing the opportunity to fortify our world-class university. The situation is analogous to Division One college football if you accept that the context is big business and proceed from this perspective.

The Hawkeye football program is a large asset and is currently being managed very well, arguably optimizing its revenue opportunity. Surely in no small part this is driven by coach Kirk Ferentz, whose compensation is high on an absolute basis but is a terrific value relative to his peers' compensation and even more so when factoring in results. The university desires to be competitive in football and is executing a plan to achieve its goals.

Not so the UI Foundation. For football context, think of the dismal era post-Evashevski and pre-Fry: ineffective leadership and subpar results (NACUBO.org is a good reference for college foundations' performance, though full accurate transparency is hard to come by). While these results are not uncommon for volunteer investment management, it does not need to be the case.

Qualified, experienced head coaches (for foundations they are called chief investment officers) are available, and better still, work for performance-based compensation consistent with the investment mandate of the institution. For fine examples look no farther than Michigan or Northwestern. To quantify what this would mean to the current endowment, a top 20 finish in college endowment performance results on the current asset base would yield more than an additional

$50 million per year! Why are we not competing?

I have encouraged the UI Foundation to take steps in this direction, and I have been dismissively told that the foundation cannot afford this approach. The reality is there are a billion (approximate UI Foundation dollar value) reasons why we cannot not afford professional management. It pays for itself, as thankfully does Coach Ferentz.

Thomas A. Wolf of Denver, Colo., formerly of Cedar Rapids, is a registered securities representative and investment adviser with a 24-year career in finance.