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Ball State outsources management of $160M endowment

July 24, 2011

Perella Weinberg Partners LP, the New York investment bank founded by Joseph Perella and Peter Weinberg, has been hired to manage Ball State University’s $160 million endowment.

Perella Weinberg’s Agility unit, which oversees $2 billion for endowments, foundations and wealthy individuals, took over the fund on July 1. Thomas Heck, chief investment officer at the Ball State University Foundation, will retain his post and work with the school’s investment committee and Agility.

The board of the Ball State foundation, which is responsible for the endowment, spent the past year exploring outsourcing, Heck said in a telephone interview. The fund gained 6.2 percent in the 12 months ended June 2010. That trailed the average return of 12 percent by school endowments, according to the National Association of College and University Business Officers.

“We didn’t have the resources to be more tactical,” said Heck, 57, who doesn’t have any investment staff. “We weren’t able to react to the volatility in the market very well.”

Ball State lost 25 percent in 2009, compared with an average decline of 19 percent among peers, following the bankruptcy of Lehman Brothers Holdings Inc. in September 2008.

The agreement with Agility allows the investment committee to focus on bigger-picture issues such as asset allocation, Heck said. Agility will build a portfolio that is diversified across geographies, asset classes and managers.

Agility’s chief investment officer is Christopher Bittman, who managed the University of Colorado endowment before joining Perella Weinberg in 2009.

U.S. endowments and foundations will outsource about $215 billion by 2015, more than double today’s $100 billion, according to Casey Quirk & Associates LLC, a consulting firm in Connecticut. Other investment-outsourcing firms include Makena Capital Management LLC in California, and Investure LLC in Virginia.

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