Krishna Memani, Lafayette’s chief investment officer (CIO), has appeared several times in the national media to explain the fluctuations in the economy. This week he gave insight to The Lafayette about the college’s approach to investments and the role of the endowment.
He explained that the Investment Office does not manage any money in-house. They instead find outside managers who can deliver good, long-term returns and allocate money to them. He emphasized that they are long-term investors, not tactical investors or market timers.
“Our aim with the endowment is to promote the vision of the college,” Memani said.
According to investopeida.com, college endowments consist of money or financial assets donated to a college. They are typically used to support the teaching, research and public service missions of the college.
Memani, who is entering his third year as Lafayette’s CIO, believes that there’s a unique resilience in the college’s endowment investment strategy.
“We came to an early agreement as to what needed to be done, set some objectives of the portfolio two years out, and I’m happy to report that we have achieved those objectives,” Memani said.“The endowment is at a very comfortable place … Resilient is how I’d characterize it.”
Given that Lafayette boasts an endowment of around $1 billion, investment comes at a larger scale. To Memani, who has a background in corporate asset management, large investment funds are familiar. He said that economic fluctuations usually do not prove too perilous to the goals of the endowment, granted they do not take on an extensive level of risk.
As a case in point, the growth of the college’s portfolio, whether influenced by outside factors such as a pandemic or inflationary periods, is anything but linear. For instance, in the 2021 fiscal year, Lafayette saw year-to-year returns of 30%, while in the 2022 fiscal year, the college saw returns of -2.5%.
Memani explained that his office is focused on the longer-term outlook and is not necessarily too concerned about these short-term fluctuations.
He explained that the endowment is largely unmovable. “The intent of the endowment is to be a perpetual vehicle,” Memani said.