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Higher Education Act Information

 

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Dartmouth Statement on Related Party Investments

May 31, 2012

Dartmouth takes a prudent, long-term approach to investment — we manage the endowment not just to help support students for their next four years at the College, but also over the next decade and the next century. To meet this goal, we seek to make the best possible investment decisions, and choose managers for endowment investments solely on the basis of their strategy, expertise and performance history, and the specific asset allocation needs of the endowment. In some cases Dartmouth has invested with firms managed by individuals who are trustees.

Such investments are explicitly legal and entirely proper. New Hampshire law imposes special requirements to assure that the transaction is conducted on an arms-length basis and is in the best interests of the non-profit organization. Dartmouth complies with all of these requirements. In addition, for investments with firms managed by not only trustees but non-trustee Investment Committee members, Dartmouth imposes internal procedures that exceed the requirements of New Hampshire law.

The successful performance of these investments over many years has been key to providing the necessary financial support to advance Dartmouth's vital academic mission. Had we chosen to exclude these funds as an option for our investment staff simply because of a connection to a trustee or Investment Committee member, our endowment returns would have been lower. Overall, Dartmouth's endowment has performed in the top-quartile for the 10-year period ended June 30, 2011 within three applicable universes of higher education and/or non-profit institutions.

Last Updated: 5/31/12