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The big money such campaigns generate comes with a huge responsibility to invest those funds cannily, and both universities are making suitable arrangements. Nick Cavalla, formerly an exec at Man Global Strategies part of the Man Group, the world's largest publicly listed hedge fund started work as Cambridge's first chief investment officer in April last year; Sandra Robertson, previously the boss of Portfolio Management at the Wellcome Trust, an influential U.K. medical charity, took up the equivalent role at Oxford five months later.
"We hope we can get our rates of return to levels comparable to the best North American universities," says John Hood, vice-chancellor of Oxford. They've some way to go. In the decade to August 2006, Oxford's central endowment delivered an annualized return of 6.7%. Over an almost identical period, an appetite for riskier investments helped Harvard's endowment return 16.7%. At Yale, the rate was 17.2%. (In a coup for Cambridge, David Swensen, the former Wall Street exec who has masterminded Yale's returns, now sits on the university's own Investment Board.)
Still, Oxford and Cambridge have high profiles and good names that won't do either any harm in reaching their targets. And their younger rivals are boosting their own names on the global stage. Imperial College, which celebrated its centenary last year, aims to pull in $410 million by 2010 to improve its campuses and bolster scholarships. Across town at the LSE, workmen are putting the finishing touches to an eight-story teaching facility, financed from the $200 million whip-round among alumni and other donors completed in March.
Almost all British universities now staff an alumni office responsible for finding former students and hitting them up for cash. As a result, the slice of British universities' income derived from endowments and investments hit a record of just under $800 million in the 12 months to August last year, 13% more than in the previous year. And since private donations take the strain off the public purse, the government is keen to promote further giving: in a $400 million scheme outlined in April, it has pledged to match such donations to universities for the three years starting next month.
Recruiting the smartest staff or students, though, is not just about pulling in cash. As part of its $400 million strategy to break into the world's top 50 universities by 2015, the University of Warwick ranked 57th, according to the U.K. Times Higher Education Supplement list, as it approaches its 50th birthday plans to permanently host branches of three or four overseas research universities on its site in the heart of England. Nigel Thrift, Warwick's vice-chancellor, won't say which universities it has in its sights; negotiations with North American and Asian institutions are ongoing. But its "International Quarter," he says, will pursue "proper, long-lasting collaborations with three or four institutions around the world, rather than 20."
Crucial in fleshing out Warwick's goals was input from its Council, the university's executive body, drawn largely from professions outside academia. Lay members, many working in business and industry, "add an enormous amount to the institution," says Thrift. Indeed, many U.S. and U.K. universities pack their governing bodies with external members; the LSE, for instance, "is, technically speaking, a company," says Howard Davies, its director. "The university has always had something like a corporate board."
But it's not the case at Oxford or Cambridge, where academics have a majority on both universities' executive bodies. Hood, a New Zealander with a background in business, is Oxford's first vice-chancellor to be chosen from outside the University. In late 2006, when he proposed giving lay members a slim majority on a new governing council responsible for non-academic matters, the idea was turned down by the Congregation, the parliament of Oxford dons. In the scramble to catch up with wealthier U.S. colleges, the dons' power could discourage potential benefactors. "A governing body dominated by academic members of a university," says Philip Harding, chairman of the British Universities Finance Directors Group, "will probably be less attractive to a major donor than one whose governors are from a mixed background."
Hood may not have the board he wanted; his decision last November to quit when his five-year term ends in September 2009 means it's unlikely he ever will. But by orchestrating Oxford's mammoth $2.5 billion campaign, he'll have played no small part in increasing the university's competitiveness in the years to come. On June 18, the university pocketed a $50 million donation from Michael Moritz, a U.S.-based venture capitalist, one of its biggest ever. He has done his bit for the dreaming spires. For the remaining Oxford alumni out there, the question is: Have you?