(Bloomberg) — Soaring returns at venture capital funds juiced results across U.S. university endowments, propelling one investment for Michigan State University’s $3.9 billion fund to an eye-popping 1,000% gain.
Universities saw their endowments swell by billions of dollars after a year which by one estimate could be the sector’s best since the mid-1980s. Powered by specific pandemic-related gains and a macro environment that’s been a boon to private investment funds, colleges are reaping returns that may not be seen again for a generation.
“There will probably be nothing like this in our lifetime,” said James Clarke, senior vice president of investments and treasurer of the Kansas University Endowment Association. “It almost felt like 2021 was the realization of the promises we were made about the internet 20 years ago — we spent our lives doing virtual meetings on Zoom with products delivered to our door and unlimited Netflix.”
About 30 venture funds that Kansas has invested in posted triple-digit gains, he said.
Equities have been surging in recent years in part due to historically low interest rates pushing investors into higher-yielding options. At the same time, venture funds have benefited from a growing number of companies staying private for longer, as well as more money chasing the next big thing.
Venture’s focus on tech companies has also helped, as the pandemic accelerated technology trends such as remote work.
“It resulted in an accelerated adoption of online services, which a lot of people expect will continue,” said Anders Hall, chief investment officer of Vanderbilt University, which saw a 57% return. “Trends that were going to happen anyway, but happened more quickly.”
There were also gains more directly tied to the Covid-19 pandemic. The 65% return at Washington University in St. Louis through June 30 was helped by a co-investment in vaccine-developer Moderna Inc., which rose about 280% in the period.
The school’s global equity portfolio gained 71.5% and its buyout, venture capital, distressed debt and growth equity investments advanced 82%, said CIO Scott Wilson.
At Michigan State, which saw its endowment return 41%, some of the biggest growth came from investments in fintech such as blockchain, and other technology including services that support online payments, said CIO Phil Zecher.
“Our whole private investment portfolio did extraordinarily well with venture up over 100%,” he said.
Some of the performance is unrealized gains, said Hall of Vanderbilt, where returns boosted its fund to $10.9 billion. Venture funds won’t actually deliver the gains until they can exit the investments, usually through initial public offerings. Even then, some firms continue to hold onto public companies, such as Airbnb Inc. and DoorDash Inc., said Hall. He declined to comment about specifics in the school’s portfolio.
“The positions in the companies themselves are so big it’s going to take a lot time to unwind these,” said Allen Huang, director of investments at Michigan State. “There’s a lot of volatility in those prices when they’ve finally liquidated and returned to limited partners, the endowments, they could be less.”The endowment of Bowdoin College, a liberal arts college in Maine, returned 57%, boosting its value to $2.7 billion, said Clayton Rose, the school’s president. Public markets created a tailwind and many of the investments that performed well were made years ago, he said. He didn’t provide details.
Bowdoin was also helped by the fact that it had liquidity in the endowment during the worst of the pandemic and didn’t need to sell anything at the bottom of the market “in a distressed way that we would regret later,” said Rose, a former banker and Harvard Business School professor.
©2021 Bloomberg L.P.
Investment firm head joins Algoma Steel's board – Sault Star
The president and chief executive officer of a New York-based investment firm is a new Algoma Steel board member.
Eric Rosenfeld founded Crescendo Partners in 1998.
He is a master of business administration graduate from Harvard University. Rosenfeld also serves on the boards of Primo Water Corp., CPI Aerostructures, Aecon Group and Pangaea Logistics Solutions, a release says.
He has served on boards since 1998. His first directorship was with Spar Aerospace, the company that developed the Canadarm used in space flights. Rosenfeld also served on the board of beverage maker Cott Corp.
He headed the arbitrage department of Oppenheimer & Co., an investment and brokerage bank, for 14 years before establishing Crescendo Partners.
Mary Anne Bueschkens, Gale Rubenstein, James Gouin, David Sgro, Brian Pratt and Rosenfeld join chair Andrew Harshaw, Andrew Schultz and Michael McQuade, a release says.
“ Our new board members bring critical expertise and diversity to the team,” said McQuade.
The other new members have backgrounds in the automotive, legal and construction sectors.
Bueschkens is a lawyer who has held various roles, including president and CEO of ABC Technologies, an automotive parts supplier.
Rubenstein is a partner in the Toronto-based law firm Goodmans LLP. She is counsel in the firm’s corporate restructuring group.
Gouin is a former head of Tower International, a global manufacturer of automotive products. He also worked 28 years at Ford Motor Company. He held two vice-president roles with the automaker.
Sgro is a senior managing director at Crescendo Partners. The firm’s services include consulting, mergers, acquisitions and capital raising support and private equity investment.
Pratt is a former chair and director of Primoris Services Corp., a parent company of construction and engineering firms. He was also president and chief executive officer and board chair of the Dallas-based Primoris, and its predecessor entity, ARB Inc., from 1983 to 2015. Pratt is a former chair of Legato Merger Corp.
All the board members are independent, except McQuade. He is ASI’s CEO.
The Sault Ste. Marie steelmaker started trading on the Toronto Stock Exchange on Thursday.
– with files from Postmedia Network
Micron Urges Government Investment with R&D Spend – The Next Platform
Over the last twenty years, memory has risen from 10% of the semiconductor market to almost 30%, a trend that is expected to continue, propelled by compute at the edge all the way up to datacenter. To meet these demands, memory giant, Micron, has announced it will make $150 billion in internal investments, ranging from manufacturing and fab facilities to R&D to support new materials and memory technologies.
The nature of the announcement serves two purposes. The first is obvious, Micron is putting a stake in the ground around its bullish view for edge to datacenter growth and their role as a primary component maker. The second is only slightly less obvious: to compel the U.S. to match funds or continue new investment strategies to support U.S. fabs and semiconductor R&D.
While $150 billion is a sizable investment, the fab component of Micron’s plans will gobble up a significant fraction. While no fab is created equally, consider TSMC’s investments in new facilities, which are upwards of $9 billion. Such investments can take two to three years to yield but the time is certainly right. Gartner, for instance, estimates the costs for leading-edge semiconductor facilities to increase between 7-10%.
While DRAM and NAND are less expensive than leading edge technologies, Micron will need to choose carefully as it sets its plans in motion. Luckily, there is ample government support building in the U.S. for all homegrown semiconductor industry, although it is unclear how federal investments, including the $52 billion CHIPS Act, will augment Micron’s own ambitions.
Micron is seeking the attention of government with its broad R&D and manufacturing investment, pointing to the creation of “tens of thousands” of new jobs and “significant economic growth.” In a statement, Micron explained that memory manufacturing costs are 35-45% higher than in lower-end semiconductor markets, “making funding to support new semiconductor manufacturing capacity and a refundable investment tax credit critical to potential expansion of U.S. manufacturing as part of Micron’s targeted investment.”
“The growth of the data economy is driving increased customer demand for memory and storage,” said Executive Vice President of Global Operations Manish Bhatia. “Leading-edge memory manufacturing at scale requires production of advanced semiconductor technology that is pushing the laws of physics, and our markets demand cost-competitive operations. Sustained government support is essential for Micron to ensure a resilient supply chain and reinforce technology leadership for the long term.”
Micron CEO, Sanjay Mehrotra says the company will “look forward to working with governments around the world, including in the U.S. where CHIPS funding and the FABS Act would open the door to new industry investments, as we consider sites to support future expansion.” The subtext there is that the U.S. is only one country in the running, among others making investments.
Increasing government support will likely align with fabs and facilities but Micron says it’s working on next generation technologies set to keep pace with growing demand.
This is part of the company’s 2030-era plan for memory technology. Micron sees edge and cloud deployments expanding but also points to AI as the leading workload across deployment types. The company’s senior VP and GM for Compute and Networking, former Intel HPC lead, Raj Hazra, says that by 2025, 75% of all organizations will have moved beyond the AI experimentation stage into production.
To support this more practically, Micron has set forth some ambitious near-term targets, including reaching for 40% improvements in memory densities over existing DRAM, double SSD read throughput speeds over current 1TB SSDs, 15% power reductions over existing DRAM and 15% better performance for mixed workloads over existing NAND.
Walmart allowing some shoppers to buy bitcoin at Coinstar kiosks
Coinstar, known for its machines that can exchange physical coins for cash, has partnered with digital currency exchange CoinMe to let customers buy bitcoin at some of its kiosks.
There are 200 Coinstar kiosks located inside Walmart stores across the United States that will allow customers to buy bitcoin, a Walmart spokesperson said.
Walmart was subject to a cryptocurrency hoax in September when a fake press release was published announcing a partnership between the world’s largest retailer and litecoin. The news had briefly sent prices of the little known cryptocurrency surging.
(Reporting by Uday Sampath in Bengaluru; Editing by Devika Syamnath)
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