College to reveal its direct investments
During the Occupy Colby movement on campus this past fall, students raised questions about how the college invests its $502 million endowment. Students also raised questions, about socially responsible investing in response to the human rights violations of the governments of Burma and Sudan in 2006.
“We want Colby to be able to uphold its values…the values in the mission—that’s what we want to see reflected in the investment practices,” Annie Chen ’12 said.
In 2006, the investment committee of the Board of Trustees added a section to the annual investment report that would evaluate if the College had successfully avoided investing in companies that supported the governments of Burma and Sudan, and divested of the one such company in which the College had been invested, among other measures. The investment committee also acknowledged that, for the foreseeable future, the primary goal of the endowment is to generate money.
In a letter to the College community in the fall of 2006, President William “Bro” Adams wrote, “Colby’s endowment is not a particularly effective or nimble vehicle for prompting political change or for political expression. Actions such as divestment should be considered only under the most exceptional circumstances.”
Five years later, during the Occupy Colby movement, Chen said that students and faculty involved in the movement observed that the College’s investment practices were not transparent. As a result, Chen and Jacob Marx ’13 contacted people in the administration to see the kind of companies in which the College was investing.
“Because Colby’s endowment is fairly large, I think…that the amount of money Colby is investing in other companies could be substantial enough to make a political statement,” Chen said.
Chen found that the administration was cooperative and helpful when she brought these concerns forward. In fact, as Vice President for Administration and Treasurer Doug Terp said, the College had been engaging in annual reviews already and avoided certain companies, sending letters to hedge fund managers asking them to engage in socially responsible investing and to review investment practices at the end of each fiscal year. However, Terp said, “No one has asked since  if this is happening.”
As a result of the efforts of Chen and Marx, changes have been made by the administration to make the investment practices more transparent and accessible to the College community. Starting with the end of this fiscal year, June 30, a section in the investment report will include the companies in which the College directly invests. Additionally, the investment advisory committee, comprised of faculty, students and trustee members, who will oversee the investment process, will be revived after having been dormant for the past few years.
The College directly invests roughly 10 percent of its endowment. A little less than 10 percent is held in government securities, and the rest is invested by outside managers or in mutual funds. Due to confidentiality agreements with investment managers, the College cannot release the specific investments of its hedge funds, and, as Terp said, often does not even obtain that information.
The list of companies provided in the investment report will reflect only a small portion of the College’s investment portfolio. However, the College’s continued efforts to invest responsibly, the reviving of the investment advisory committee and the yearly letter to managers will all serve to encourage socially responsible investment practices by the managers.
One of the worries regarding publishing the College’s investments is that students will lose sight of the driving factor behind the endowment—to generate money—and see it as a political tool. However, Chen said that as long as students keep the goal of the endowment in mind, it will not be a problem.
“I agree with the administration’s stance that it is important right now to make money with the endowment,” she said. “But I do think that in the long run if Colby is going to be the kind of institution that we all want it to be, I think that there needs to be a new attitude toward the way it behaves when it’s investing.”