When he began leading the University of Virginia’s investment management firm, he oversaw roughly $2.5 billion in assets. More than five years and one Great Recession later, Chris Brightman, CEO of the University of Virginia Investment Management Company, resigned for “personal reasons,” with an endowment pool totaling $4.4 billion, according to a January 31 investment report.
“My five years serving the University were an honor and the highlight of my professional career,” said Brightman in a statement. “I regret that my personal situation prevents me from continuing to serve.”
Brightman oversaw UVA’s endowment in the throes of the economic downturn, when it plummeted from $5.1 billion in value in June 2008 to $4.2 billion in October 2008. Furthermore, UVA’s endowment fund lost 22.7 percent of its market value from fiscal year 2008 to fiscal year 2009, according to a survey done by the National Association of College and University Business Officers and the Commonfund Institute.
The sharp decline was due in part to UVIMCO’s investments in private equity and hedge funds, a practice many universities with substantial endowment funds have undertaken in recent years. While the decline in endowment dollars somewhat strains UVA’s budget in the near term, UVA’s endowment only provides just north of 5 percent of the school’s total operating budget.
Former UVIMCO CFO Henry Kaelber told C-VILLE that mixing riskier investment practices with more conservative ones usually proves worthwhile in the long run.
“It’s always easy to slap people in a down market, especially if they’re an investment professional, but I think [UVIMCO] takes a really thoughtful approach,” said Kaelber, who worked at UVIMCO from 1997 to 2003.
Though he did say investing endowment dollars in more illiquid assets like private equity and hedge funds is a “bold strategy,” Kaelber also said it “wasn’t a bad idea,” either.
“I don’t look at university endowments as 70-year-old retiree money,” he said. “They have a unique advantage over most other long-term investors in that endowments’ time horizon is in perpetuity. Volatility is what should concern constituents of an endowment, not risk tasking.”
In addition, UVA officials pointed out in 2008 that UVIMCO’s losses were less severe than what the Standard & Poor 500 index hemorrhaged over the same time span.
UVA spokeswoman Carol Wood told
C-VILLE that Brightman did “an outstanding job of leading UVIMCO.” Wood would not comment on whether his departure was in any way linked to the arrival of Teresa Sullivan, who replaces John Casteen as UVA’s next president on August 1.
While UVA conducts a national search for Brightman’s replacement, current UVIMCO board member John Macfarlane will take over as chairman of the group’s investment committee. In addition, Leonard Sandridge, UVA’s executive vice president and COO, will assume Brightman’s administrative roles in the interim. Sandridge is slated to retire from his post in December.
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