The University of Wisconsin Foundation announced Tom Olson as the new chief investment officer Tuesday, who will be responsible for overseeing the allocation of over $2 billion in assets.
According to Olson, $1.5 billion are related exclusively to endowments and are therefore invested with long-term goals in mind.
“As an endowment, this money is supposed to be there perpetually, and we want to make sure the dollars we have today are working on behalf of the university in perpetuity,” he said.
Sandy Wilcox, president of the UW Foundation, added Olson is also responsible for another $800 million, which is considered expendable and can be used in the short-term as long as the funds are used according to the guidelines laid out by the donor.
The transition comes at a crucial time for the UW Foundation, as the organization has been tasked with raising funds to match financial aid grants for the Madison Initiative for Undergradutes. In addition, it follows a transitionary phase for the foundation, as Wilcox announced last month that he would be stepping down at the end of 2010.
Olson said the position is particularly important to UW not only to ensure proper investment of funds, but also to maintain the trust of the people who donate to UW.
“The main part of the job is to be proper stewards of that money that comes in by donors that have been very generous to the university,” Olson said.
Prior to taking the position, Olson was heavily involved in the UW Foundation for four years. He worked with former Chief Investment Officer David Erickson to design the current portfolio, which Wilcox said he views as an advantage and also eased the transition process.
Not only was Olson familiar with the portfolio, which made the transition smoother, but the UW Foundation was also familiar with his character and who he is as a person, according to Wilcox.
Since he was involved in designing the current portfolio, Olson said even though he was just appointed as chief investment officer he does not want to alter the investment plan already in motion.
“Our current plan in place has been the same plan we’ve been executing,” he said.
One of the challenges facing Olson is the economy. Despite this, Olson felt even in an economy free from recession, there would still be obstacles.
To overcome the obstacles set before him by the job in general, Olson said being as informed as possible is the first step. The next step in regard to the economy is to maintain a defensive stance within the portfolio, which Olson felt is the best way to protect the investments.
Wilcox felt overcoming the challenge posed by the economy is a matter of following the market closely and taking what it gives.
“It’s just a matter of trying to know when to take more risk … (and) not making any sudden changes because that gets expensive,” he said. “If anybody knew exactly when and how to invest that would be the magic bullet.”
Wilcox added while Olson makes the final decisions regarding investments, a committee comprised of people active in the investment business work together to ensure the decisions made are the most beneficial to UW.
