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Trustees vote to bundle more assets under Van Eck control, drop RS Investment ties

New York based investment group has large holdings in energy, gold.

Temple will fire RS Investments from managing part of its endowment and will shift those responsibilities to Van Eck Associates Corp., the Investments committee of the Board of Trustees announced at a meeting on Feb. 9.  

A group of investors at RS recently left to form a new firm, so the committee decided to break ties with the remnants of RS. Van Eck Associates Corp., a New York-based firm that is part of Van Eck Global, will continue to perform its previous role as investment manager for part of the post-retirement plan.

“We no longer felt comfortable that [RS] had the right people and we weren’t confident that we would get the appropriate level of attention that we needed,” committee chairman Christopher W. McNichol said.

Van Eck and RS Investments are both categorized in the committee’s investment policy and procedures manual as “non-real estate real assets,” which means the investments are typically in food, manufactured goods or energy. More than 73 percent of Van Eck’s investments are in energy, McNichol said.

According to NASDAQ, Van Eck has a market value of $21.5 billion. It is most committed to investment in gold companies like Goldcorp Inc. and Barrick Gold Corp., the world’s largest gold mining company.

In 2010 the Securities and Exchange Commission granted Van Eck exemptions from multiple sections of the Investment Company Act of 1940 so that it could help U.S. investors invest in African companies.

“[Van Eck] is a firm we’re familiar with and done our due diligence on,” Chief Financial Officer and Treasurer Ken Kaiser said after the meeting. “They’re performing quite well.”

Investment portfolio managers from RS Investments have been quoted far less often than those from Van Eck in business news outlets like Business Insider and Reuters.

Temple’s endowment is about $278 million as of 2012 and collects about 4.5 percent interest, Kaiser said. McNichol said that the interest is used to “pay the bills.”

Temple, like many other universities, doles out parcels of the endowment to investment managers like Van Eck to potentially gain more money to spend on things like financial aid.

After the motion to cut ties with RS Investments was passed without objection, the committee reapproved Miller Investment Management L.P. to run its own specially designated pools of money within the retirement and pension pools.

Miller will have no more than 10 percent of each of the pools to invest, Kaiser said. It will continue to operate with less adherence to the investment policy than other investors, since it can “take advantage of opportunities” and can “manage nimbly in the markets,” Kaiser said.

The amount of money in the pools has gone up “considerably” since Miller was given that opportunity, Kaiser said.

Miller, an estimated $179 million firm that is based out of West Conshohocken, Pa., owned 20 percent of the burger chain Five Guys as of 2012. The firm’s largest share value investment is in SPDR Gold Shares, publicly traded on the New York Stock Exchange. The firm claims that it has “no ties to fund management companies or brokers.”

The next round of trustee committee meetings will be on Wednesday, Feb. 26, at noon, when the Student Affairs and Campus Life, as well as Diversity committees will meet jointly on the second floor of Sullivan Hall. There will be a public meeting after a “brief” executive session, Assistant Secretary Janet Carruth said.

The athletics committee meeting for that date was canceled.

Joe Brandt can be reached at joseph.brandt@temple.edu or on Twitter @JBrandt7.

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