The University of Virginia Investment Management Company (UVIMCO) looks for new leadership as Larry Kochard announced earlier this month that he will step down from his position as UVIMCO’s chief executive officer and chief investment officer by the end of the year, leaving behind a legacy of growth and varying returns.
This announcement comes at a crucial time as the returns made on the endowment are slowly making up more of the University’s general operating budget. Meanwhile, state appropriations have been declining since 1990 and are now contributing to less than 10% of the total budget.
Larry Kochard joined UVa after serving as the chief investment officer at Georgetown University. His previous experience includes teaching at UVa’s McIntire School of Commerce and serving as managing director of equity and hedge fund investments at the Virginia Retirement System. His job at UVa has included running the investment management of the university’s endowment funds, providing leadership for UVIMCO’s staff and serving as the face of the firm. After he steps down at the end of the year, Kochard intends to pursue other investment management opportunities.
Under his leadership, UVa’s endowment increased from $4.4 billion in 2010 to $8.6 billion in 2017. Kochard is also credited with creating a highly-skilled team of investment professionals. Technology seems to be a central theme during his tenure with his team largely investing in technology companies expected to grow in the long term. Furthermore, the returns from UVIMCO’s investments have been funding technology in the Curry School of Education in the form of teaching simulators as well as in the W.L. Lyons Brown III Innovation Lab, a joint venture at the Darden School of Business with the Batten Institute of Entrepreneurship and Innovation focusing on new start-up technologies.
The firm abides by a specific investing philosophy in which it invests in the long term focusing on price by investing specifically in undervalued securities and asset classes. It not only has an “experienced and dedicated” staff, but also partners with external managers who have expertise and a strong track record of getting returns. The UVIMCO team has attempted to diversify the portfolio to try to eliminate risk and changes in various sectors.
In the last five years, UVIMCO has experienced uneven returns. With 13.4% returns in 2013, that number grew almost six percent by 2014. The next two years saw a decline in returns with only a 7.7% return in 2015 and a negative return in 2016 of 1.5%. In 2016, Kochard faced criticism for losing money from the endowment, but recovered the following year. With the past few years being volatile, UVIMCO reported 12.4% returns in 2017 and an impressive total market value of their assets at $8.6 billion. UVA’s endowment is now in the top five among public institutions and in the top twenty among national universities.