MIT donors play a key role in the success of the MIT endowment, whose investment returns are the backbone of academic and research activities at the Institute. MITIMCo’s chief financial officer Marianthe Mewkill talked with Corridor about their investment approach, its performance throughout the coronavirus pandemic, and how planned giving makes an impact on MIT’s long-term success. Mewkill will speak more about this topic at the November 17 Corridor webinar.
How does MITIMCo’s approach to endowment management stand out from other universities and private wealth management firms?
We identify exceptional investment managers from the bottom up and build long-duration partnerships with them rather than focusing on top-down asset-allocation targets. We spend enormous effort identifying investment managers who are likely to thrive over the long term: those with patience, high ethical standards, a focus on high-quality assets, and superb investment judgment. Because of MIT’s lengthy investment horizon, we can weather short-term market fluctuations and wait for the long-term realization of value. Our portfolio also is built without regard to benchmark weightings.
What drives these managers’ investment strategies, and how have these strategies played out during the coronavirus pandemic?
MIT benefits from a stable capital base, a global reputation for cutting-edge education and research, and sophisticated governance. Our managers make investments that play to these strengths. We avoid short-term trading strategies or other arenas where MIT has no obvious competitive advantage. Because of this strong foundation, MIT’s endowment has performed well over the long term despite the financial market turbulence caused by the coronavirus pandemic.
What are the benefits of investing alongside the endowment through MIT’s planned giving program?
By investing alongside the endowment, donors can directly participate in furthering MIT’s mission while also supporting their financial goals. One way to do this is through a charitable gift annuity, since investors receive a percentage of the portfolio’s annual market value as income. A donor-advised fund can also increase the impact of the fund’s gifts that are allocated to MIT, with the donor’s contribution compounding at the same rate as the strategy we deploy for the endowment.
Why are endowed funds so important to MIT’s mission?
Endowed funds represent the bedrock of MIT’s ability to provide long-term support to MIT researchers and students. Endowment resources are spent each year to support financial aid, cancer research, climate action, and countless other efforts led by faculty and students.
MIT’s Campaign for a Better World, which closed this year, raised more than $6 billion for Institute priorities. Has MITIMCo’s strategy evolved during that time, and has Campaign fundraising affected it?
Every MIT campaign impacts us because MIT’s endowment would not exist without the generosity of the Institute’s donors. We are only able to do our job and invest the endowment thanks to them!