A MAJOR Oxford University benefactor last night hit out at the colleges' approach to investment after it emerged that nearly half of them had plunged into the red.
Sir Peter Lampl, who is believed to have given several million pounds to Corpus Christi College, told The Times that he was dismayed at the "over-traditional" investment decisions of the Oxford colleges compared with their American counterparts such as Yale and Harvard.
Oxford University's 36 colleges yesterday released their financial figures for the first time*, revealing that while their collective worth for 2002-03 was £1.6 billion, almost half were showing deficits of between £40,000 and £869,000.
Sir Peter demanded that Oxford bursars dump their conservative investment strategies and urged them to invest further afield. "You have to manage money more aggressively," he said, pouring scorn on the university's insistence on keeping college funds separate from each other. He argued that US universities such as Yale and Harvard pool their funds and manage to secure more competitive terms from Wall Street fund managers.
Currently, Oxford bursars limit the investment of college funds largely to British shares, agricultural land and property. Sir Peter's warning came as a former bursar of Brasenose College also attacked the Oxford colleges for their endowment strategies. Robert Gasser, now at Chiswell Associates, an investment house specialising in charity endowments, pointed out that Yale and Harvard had significantly out performed Oxford over the past two decades. "The accounts reveal an amazing reduction in resource allocation... what organisation can withstand that without coming under huge pressure?" he asked. Mr Gasser said colleges had largely missed out on the surge in returns in 2002 and 2003 in investments such as hedge funds, venture capital and private equity - assets which typically Oxford colleges avoid. By contrast, Yale had performed a root and branch surgery on its endowment policy in the mid-1980s. As a result, Yale turned a £2 billion endowment into a fund worth £8 billion over 15 years.
Frank Marshall, the bursar of University College, admitted that Oxford should go further in pooling its knowledge of investment management to make the best use of resources. "Some colleges could certainly learn from each other, especially where they have all academics on their investment board," he said. "In any federal structure there are inefficiencies, and we are already buying collectively when it comes to food, but there is certainly more scope in investment." With capital worth £63 million, University College ended 2003 with a surplus of £408,000 of an income of £7 million. Since Mr Marshall became bursar three years ago, the college has invested half its assets in property and 35 per cent in stocks and shares. "Basically we have spent less than we earned because we made it a priority to retain money to invest in the future," he said. Mr Marshall spent 20 years in the City, latterly as an investment banker with Schroders.
Overall in 2002-03 the colleges made a surplus of £2.4 million as total income came to £199.1 million and expenditure remained slightly below at £196.7 million. Of that income, £69 million was from endowments given to individual colleges, while the rest was made up from tuition fees, rent, research grants and letting out premises for conferences. With an 8.9 per cent return on their investments in that period, Mr Marshall says Oxford's investments compared favourably to the stock market and the all-share index which ran at 3 to 4 per cent. He rejected the notion of pooling resources. Each endowment is given to an individual college, which has a separate legal identity. "If entities in a federal structure are legally independent, it's no more valid to say that all the people of Wimbledon should pool their resources," he said.
| COLLEGE | OPERATING SUR/DEF £000's | CAPITAL £m | COLLEGE | OPERATING SUR/DEF £000's | CAPITAL £m | |
| St John's | -£869 | £202 | Wolfson | £30 | £18 | |
| St Hugh's | -£801 | £14 | Linacre | £159 | £4 | |
| Balliol | -£678 | £40 | Lady Margaret Hall | £195 | £17 | |
| Templeton | -£567 | £1 | Corpus Christi | £204 | £37 | |
| St Hilda's | -£521 | £26 | Trinity | £254 | £45 | |
| Pembroke | -£414 | £20 | Merton | £290 | £92 | |
| Wadham | -£331 | £26 | Lincoln | £338 | £35 | |
| Queen's | -£233 | £82 | St Catherine's | £348 | £33 | |
| Somerville | -£233 | £26 | Brasenose | £287 | £57 | |
| Magdalen | -£173 | £102 | University | £408 | £63 | |
| St Peter's | -£147 | £16 | Jesus | £508 | £72 | |
| Nuffield | -£129 | £101 | Hertford | £773 | £29 | |
| Mansfield | -£100 | £5 | Exeter | £819 | £29 | |
| All Souls | -£40 | £129 | New College | £833 | £58 | |
| Harris Manchester | -£24 | £1 | Christ Church | £1,000 | £173 | |
| St Anne's | -£0.106 | £18 | Keble | £1,400 | £16 | |
| Oriel | +£1 | £29 | St Antony's | £76,000*** | £19 | |
| Worcester | £27 | £16 | St Edmund Hall | £208,000*** | £17 |
* This is misleading. As Akme followers will already know, the Oxford college accounts were in fact first published in 1997, when the 1993 Charities Act finally became law, obliging the colleges to make them available (see Sunday Times article, November 1997 and Akme index and explanation). The 2000/01 and 2001/02 figures (and for the five richest Cambridge colleges) were posted on this website in March 2004 (see Sunday Times report). It seems that what they are relying on here is that for the first time the accounts are in the Government-required 'SORP' format, bringing them more into line with conventional commercial practice. The colleges now provide written reports and valuations of their capital assets, although of course without lists identifying them (the estates and farms up and down the country, the docklands, the commercial and residential properties, the stockmarket portfolios etc.), these cannot be checked. Amazingly, Akme's guesstimates of the colleges' 2002 capital assets, which were casually inferred from their declared income streams and then quoted by the Sunday Times, have turned out to be roughly correct, as have Akme's league table rankings of the colleges' relative wealth and performance. The whole PR fanfare may even look like a direct response to Akme's Spring posting, but the timing is presumably coincidental. Still it is nice, for once, to feel oneself the triggering puppeteer rather than the peppered puppet. Hard-pressed scholars are advised to keep revisiting this site for further revelations.
** The whole basis of this table seems perfectly barmy. Unlike the tables/lists in the Financial Times,Guardian and Oxford Times (linked below), in which the colleges are ranked by endowment assets (wealth, capital, what-you-will), here they are ranked by the magnificently irrelevant annual operating surplus/deficit figures, leaving mighty St John's rubbing shoulders with puny Templeton at the top (or is it the bottom?) of the table, and preposterous entries like St Anne's £0.106.
*** Adding to the madness, these must surely be Oxford mistakes, unless those terrifically brainy researchers at St Antony's and Teddy Hall have found a way of turning Thameswater into gold.
CLICK FOR OTHER CONTEMPORARY REPORTS ON THE OXFORD COLLEGE ACCOUNTS:
The Financial Times, 7/7/04 (+ table), The Daily Telegraph, 8/7/04, The Guardian, 7/7/04 (+ table), The Guardian, 8/7/04, The Oxford Times, 9/7/04 (+ list). See also Sunday Times, 16/11/97, Sunday Times, 28/3/04, THES, 16/7/04 and THES, 1/10/04.
CLICK FOR AKME INVESTIGATION: THE COLLEGES' INVESTMENT PERFORMANCE, 1973-2003
Press release and Index, and Oxford Student, 26/5/05 on the failure of the college contribution scheme.