June 19, 2011

After CIO’s Abrupt Exit, Another Investment Officer Resigns

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Cornell’s Senior Investment Officer John Regan announced his resignation earlier this month, fewer than two months after Chief Investment Officer Michael Abbott abruptly left the University for reasons that remain unclear.

Regan, who said he is leaving to found his own capital investment firm, served as one of two senior investment officers overseeing Cornell’s hedge funds and private equity portfolio.

Abbott left on May 1. Cornell said that it had “become apparent that his style of conducting business is inconsistent with Cornell’s policies and expectations.”

Regan is leaving to found Permanens Capital Advisors, an asset management firm that will begin investing $300 million on July 1. Permanens will provide portfolio management for endowments, foundations and other institutions.

Regan said that his departure was not related to Abbott’s.

“It’s just a case of bad timing; this is something that anyone would leave most jobs to go do,” Regan said in an email. “The timing for us is now and the opportunity is not going to be there in a year.”

Cornell’s $5.28 billion endowment, which Regan helped to manage, has grown considerably in recent months. Between July and April, it gained 19.3 percent, according to a University statement.

“As a University, we are always sorry to see talented employees leave, but we understand and commend the entrepreneurial spirit that led John Regan to pursue this new opportunity,” President David Skorton said in an email.

Regan’s responsibilities at Cornell will be taken up by other members of the investment office, according to a press release.

A.J. Edwards, the interim chief investment officer, “and Cornell’s team of professionals in the University’s investment office will continue to work effectively with the Board of Trustees’ Investment Committee to ensure that the University meets its investment targets,” the press release stated.

Edwards and Peter Gould, chairman of the Investment Committee, could not be reached for comment.

Regan is founding the firm with Joseph Steinberg, president of Leucadia National Corporation. Steinberg and Regan met during the financial crisis as they helped restructure the $21 million endowment of Poly Prep Country Day School in Brooklyn, N.Y.

Their investment management firm already has one client, a school in the southern United States, and it will be working to build the school’s endowment, Regan said. He declined to provide the name of the school.

“We’re building an endowment from scratch,” Regan said. “Since the crisis, we’ve thought about how endowments should be managed and what’s going on in the market. We’re starting with a blank sheet of paper, a lot of cash and it’s an interesting case study.”

Original Author: Juan Forrer