Investing is a long-term game, but Fort Lewis College’s first foray with $6 million of its assets is showing success, increasing in value by more than $255,000 in its first six months.
That’s 7.5 times better than what it would’ve made if the state had invested that money.
The college’s Investment Committee met Thursday to review the report from its adviser, Public Financial Management Group, through the second quarter of 2016, which ended June 30. FLC received permission from the Colorado General Assembly to remove the $6 million – about 20 percent of its assets – from the Colorado Department of the Treasury and take charge of investing some of its own funds at a higher rate of return and risk.
The funds invested by the Colorado treasurer will bring in less than 1 percent this year, FLC Associate Vice President of Finance and Administration Michele Peterson said. The funds invested by PFM have increased in value 6.4 percent, just slightly more than the index of 6.3 percent, as of Aug. 11, representatives of PFM said during the teleconference.
“That means the $6 million would have increased less than $30,000 in the same six months if we’d left it with the treasurer,” Peterson said.
It’s not completely apples to apples to compare FLC’s investing to the treasurer’s, said Steve Schwartz, vice president of finance and administration. The treasurer operates under strict guidelines in investing strategy to minimize risk.
“But it is an important comparison to measure the success of the investment program and another benchmark,” said Steve Short, chairman of the committee and a member of the college’s Board of Trustees.
One move PFM made with the portfolio may spare FLC from some of the volatility in the market after Great Britain’s recent vote to exit the European Union. In two moves, one before and one after the Brexit vote, PFM moved the college’s money out of international markets and into domestic markets, focusing primarily on fixed-income funds.
“When Brexit happened,” Schwartz said, “I was worrying about what would happen to our investments. But we’re in it for the long haul, so what matters is how it looks in five years, in 10 years.”
Taking over some of its own investing is part of Fort Lewis’ strategic plan, he said.
“The plan should develop new streams of revenue,” Schwartz said. “We need to learn how this all works and prepare ourselves for a possible future (where state funding continues to decrease), be more entrepreneurial.”
abutler@durangoherald.com
