NEW BOOK: ‘Endowment Management for Higher Education’ Outlines Best Practices for Higher Education Investment Committees

ARLINGTON, Va., June 22, 2017 — The numerous challenges of investing are both technical and human and to overcome them, endowment stewards must be as attentive to potential landmines in governance as they are to those in global markets. Endowment Management for Higher Education, written by Nicole Wellmann Kraus, CFA and Hilda Ochoa-Brillembourg, CFA, both of Strategic Investment Group, and Jay A. Yoder, CFA and published by the Association of Governing Boards of Universities and Colleges (AGB), aims to set a framework for best practices around endowment management.   

The book is a primer for all investment committee members, new or experienced, who wish to make sure they fulfill their fiduciary responsibilities. The authors explain why committee members must prioritize building the endowment to provide financial stability necessary to accomplish the mission of the institution: educating outstanding students. They also define the best practices in investment committee governance and the landmines that cause many committees to destroy hard-earned funds. Additionally, readers will find practical guidance on creating an investment policy as well as carefully selecting ideal partners to help manage the endowment (e.g., in-house CIOs, consultants, OCIOs, or investment managers).  Lastly, the challenging task of determining the risk tolerance of an organization is addressed in detail, along with advice on how to manage the many types of risks involved in managing an endowment.

“We have had the great pleasure to work with many excellent investment committees and unfortunately, have heard of many regrettable situations often caused by governance lapses. Given the increased need for colleges and universities to build their endowments and admit the best students without regard for their financial situations, we wanted to share our knowledge with the objective of helping all schools develop their financial resources,” said Ms. Kraus, Managing Director and Global Head of Client Development at Strategic Investment Group, clarifying the motivation behind writing the book.

The authors provide straightforward recommendations for successful investment committee governance, which include:

  • Clearly delineate and document the role and authority of all key parties involved in management of the endowment.  Many governance failures stem from the lack of understanding or regard for the separation of duties.
  • Choose the chair of the committee carefully.
  • Preserve institutional memory. Resist the urge to turn over the committee too quickly. Many of the investment committees who had the steadiest hand through the financial crisis benefited from long-serving members. Also, keep minutes that document the reasons behind all decisions made.  It is a good fiduciary practice and can help avoid knee-jerk reactions when a decision does not “work out” immediately. 
  • Ensure open and regular communication with other key members of the institution—especially the finance committee and the full board. Many investment strategies may be unwound at exactly the wrong time if the key decision-makers are not involved and engaged from the beginning, especially when embarking upon a new investment. 
  • Establish requirements for investment committee members including: attendance at meetings, coming prepared, and a willingness to listen to the opinions of others. These are fundamental and important points to avoid many of the key investment disasters. One of the most problematic issues committees may face is a committee member who attends infrequently and was not there when a key decision was made. They often still reserve the right to “speak up” when a manager or asset class is not performing well.  This can be destructive to the workings of the committee.

Kraus, Ochoa-Brillembourg, and Yoder emphasize that good investment governance is a precursor to strong endowment management and that in the current environment, growing endowments are indispensable to defraying ever-rising costs.

Books are available for pre-order at the AGB Store.

About the Authors:

Nicole Wellmann Kraus, CFA

Hilda Ochoa-Brillembourg, CFA

Jay A. Yoder, CFA

About the AGB:  

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Please visit to learn more about Strategic Investment Group.

For further information or press inquiries, contact:
Nicole Wellmann Kraus, CFA
Managing Director, Global Head of Client Development 
(703) 243-4433


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SOURCE Strategic Investment Group