UPenn's investment chief is out

Kristin Gilbertson, chief investment officer for the University of Pennsylvania's $7 billion+/- endowment, who guided the fund through the 2009 markets collapse that Penn largely avoided but which cost Princeton and other hotshot private-equity managers billions, is out of the job she held since 2004. PEhub note here. Recent Gilbertson interview on Bloomberg here. 

Penn returns have trailed Harvard, Yale and Princeton, more often than not, in recent years.

Gilbertson once told me she was brought to Philadelphia from Stanford to boost private investment holdings, but moved slowly because good private assets were only available at high premium prices in the mid-2000s. As a result, Penn's fund held easy-to-sell government bonds when the markets froze, enabling the school to raise cash without losses, while other schools were forced to liquidate undervalued investments at a loss.

"She moved the endowment into "a more dynamic strategic asset allocation," as executive vice president Craig Carnaroli put it in a note to deans explaining her departure. He also credited her with helping manage pensions and other investments for Penn's medical school and hospitals and with Penn's extensive capital-raising campaigns. She will remain a Special Advisor through year's end as Carnaroli and Penn president Amy Gutmann seek a successor.

Stocks-and-bonds chief David Harkins will serve as interim chief investment officer in the meantime. The fund has been over-invested in stocks and bonds, relative to private investments, since former Windsor Fund manager John Neff built up the endowment in the 1980s and '90s, avoiding private investments despite calls by some Penn trustees to diversify.