University of California endowment’s performance ‘bit of a bloodbath’

By Randy Diamond

University of California endowment, Oakland, returned -3.4% in the fiscal year ended June 30, driven by weak returns from its public equity and hedge fund investments, said Jagdeep Singh Bachher, the university’s chief investment officer, at a meeting last week.

The $9.1 billion endowment’s custom benchmark returned 1.7%, university data show.

“It was a bit of a bloodbath,” Mr. Bachher told the Regents Committee on Investments at its Friday meeting in Los Angeles, a meeting webcast shows.

The university’s $54.1 billion pension plan also posted a negative return, -2%, for the fiscal year, underperforming its custom benchmark of 0.8%.

Over the five years ended June 30, the endowment returned an annualized 6.5% compared to the benchmark’s 4.9%, and for the 10-year period, it returned 5.9% vs. the benchmark’s 5.2%.

The defined benefit plan returned an annualized 6.1% for the five-year period compared to the benchmark’s 5.5% and 5.4% for the 10-year period compared to the benchmark’s 4.9%.

The performance results came as staff changes continue in the investment office, which Mr. Bachher took over in April 2014. Since his arrival, a number of key officials have resigned or retired and Mr. Bachher has put a new leadership team in place.

A July 31 letter from Mr. Bachher to staff, a copy of which was obtained by Pensions & Investments, shows John Cole, managing director, private equity and real assets, left to join an unspecified family office.

Mr. Bachher said in the letter that his office is seeking a managing director, real assets; a director, private equity; a director for public equities; and a director for investment operations.

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[Source]: Pensions & Investments