Recently the University of Connecticut Foundation announced the selection of a Houston-based investment management firm to oversee $130 million of endowment funds. Covariance Capital Management shall act as an outsourced chief investment officer of the foundation.
While the $130 million only represents a portion of the approximately $363 million endowment funds most recently reported as of last September, there are opportunities to increase the management opportunities based on Covariance’s performance. Covariance is an established and known firm within the industry managing approximately $2.3 billion for clients as of September 30, 2015.
Why the interest you may ask? Well recently the Connecticut media focused attention on General Electric relocating corporate headquarters outside of Connecticut. Much was made about the impact on Fairfield County. The same county that is nationally known as a mecca of financial service firms.
The expertise in the field of investments and banking available in Fairfield County is well known on a national basis. It is these very services that generate enormous funds for the State of Connecticut in the form of taxes. The very taxes UConn depends on for funding.
The importance of buying locally is recognized by the growing popularity of farmers markets across Connecticut and other efforts to support local small business. We all know that local business supports our communities, with jobs and taxes providing money for our schools and local government.
UConn should be more cognizant of the hand that feeds them. Taking their business opportunities out of state does not strengthen our economy, does not provide jobs, nor generate taxes to support their very institution.
Legislators should be asking questions about this decision. Our legislators are being pressured to increase funding for UConn at the same time UConn is taking business opportunities out of Connecticut.
One hand washes the other, and perhaps it is time for UConn to get a lesson in the economics of having clean hands. Somebody has to tell the University of Connecticut Foundation this is a two-way street before our financial services industry takes a one-way street out of Connecticut like General Electric and a growing number of taxpayers already have.