SOURCE: FUNDFire
DATE: 12-16-2009
HEADLINE:
Baylor CIO Departs for Perella Weinberg
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By Whitney Kvasager
Kent Muckel has resigned as CIO of Baylor University after just over seven months on the job and will become a partner at Perella Weinberg Partners’ Agility asset management arm. It’s the second time in recent months that Agility has hired a CIO away from a prominent university foundation, and at least the third in recent years.
Muckel will depart Baylor Dec. 23 and begin his new job in early January. He will be based in his home state of Colorado.
“Kent has helped Baylor to maintain a strong investment portfolio during challenging economic times,” says v.p. for finance and administration Reagan Ramsower in a statement. “We understand that this is a unique professional opportunity for Kent that also serves the needs of his family.”
Muckel’s move to Agility comes after his former colleague Christopher Bittman made a similar career change. Bittman was CIO of the University of Colorado Foundation when Muckel was a senior portfolio manager there, before Muckel moved to Baylor earlier this year. In July, Bittman became Agility’s CIO at the same time the Colorado foundation outsourced management of its $825 million endowment to the firm.
It’s unclear whether Muckel’s arrival at Perella Weinberg signals a similar outsourcing arrangement between the firm and Baylor. The school says it “will consider a range of possibilities before announcing next steps in replacing its CIO,” but does not give specifics. A spokeswoman says Ramsower was away from the office Tuesday and unable to share details.
A recruiter says outsourcing could make sense for Baylor, and that other schools have discussed doing so recently.
“We hear this frequently, that organizations are thinking this through,” says Deb Brown, managing director at recruiter Russell Reynolds Associates. “They are certainly exploring the outsourcing route, and there is even some rumbling from schools about collaborating and creating a combined CIO role [between staff and an outside firm].”
Brown notes that if Baylor is planning on replacing Muckel with another permanent staff CIO, officials will have to look beyond the traditional set of applicants because the talent pool has shrunk significantly.
“The demand for the skill set endowment leaders have is coming from many, many angles: asset management firms, family offices, other pools of capital in the endowment style,” she says. “We’ve been telling clients that they cannot be constrained by conventional thinking. Rather than just recruiting from similar institutions, they have to think about who else might be motivated to take on that role.”
Whether the school plans to outsource its assets or hire a new CIO, the firm or individual who takes over will join a four-person investment office staff overseeing an unusual portfolio. Baylor has become known as an innovator in asset allocation since Muckel’s predecessor, Jonathan Hook, implemented a thematic investment approach.
Since 2007, the endowment has used just four broadly described asset classes. Those include a market exposure folder, which includes domestic and international equities and long-short hedge funds; an inflation hedge folder, including real estate, timber, infrastructure, natural resources and other real assets; a risk reducer portfolio that includes fixed income and low-volatility hedge funds; and a return-enhancing folder that houses emerging market and private equity investments.
This approach served the school well in last year’s market downturn. The school’s student newspaper reported that the endowment dropped 13.3% during the fiscal year 2009, falling from $1.05 billion to $936 million. Other schools fared far worse, with the average returning -19% and some of the biggest names, such as HarvardUniversity, suffering close to -30% returns.
Muckel joined Baylor in May after two years at the University of Colorado Foundation, his alma mater. Ahead of his work in Colorado he spent eight years working through the ranks at Qwest Asset Management, the retirement plan for employees of Qwest.
“I am grateful for the opportunity to have served Baylor. In a short period of time, I have come to admire immensely and respect the university’s leadership, including Baylor’s talented investment committee and staff,” Muckel says in a statement. “I strongly believe in Baylor’s mission and will remain an enthusiastic supporter of the university.”
Perella Weinberg Partners, a boutique investment bank founded in 2006 by Joseph Perella, launched Agility in 2007. Agility made a big splash soon after its founding with the high-profile hire of Bob Boldt, the former CEO of the University of Texas Investment Management Company.
Across all its units, Perella Weinberg had capital commitments and assets under management totaling $4.7 billion as of mid-year, the firm said then.