Guest Post: feelthebern – More questions for the ANU

Have a look at the ANU endowment 2013 report.

ANU Balance sheet

The key line is:

Investments LTIP (which typically stands for Long Term Investment Portfolio) – $165mill

Now we look at the ANU’s own website:

The stocks to be divested represent around 5.1 per cent of the University’s Australian equity holdings and approximately one per cent of its total investment holdings.

The University Council also agreed to move to an outsourced management of domestic equities using an enhanced index manager.

The selection of the manager will include assessment of their ability to meet the University’s SRI requirements.

There are two things to note from this.

  1. WTF is a bunch of boffins  managing a $165 million investment portfolio. Most organisations like this have outsourced this years ago (for better or worse).
  2.  They said they plan to use “an enhanced index manager”.

For a not for profit (nfp) organisation like this they will be overweight Australian equities (because nfp’s just lurrve the franking credit refund). The most relevant index is the ASX/S&P300.

Here is a list of companies in the ASX/S&P300 index.

As you know, there are a lot of mining companies in the ASX300.

Here is the sector breakdown.

ANU divestment

So Materials (resources) & Energy (oil/gas/coal) make up 22.5% of the ASX/S&P300.

Sooooo, the ANU makes a big song & dance about selling 5.1% of its direct equities which are in “black listed” companies.

But then outsources the domestic equities portfolio to an enhanced index manager who will most probably try aim to outperform the ASX/S&P300 index with has a 22.5% weighting in the companies they are so desperate to avoid.

So somehow it’s not okay to have a 5.1% exposure to something DIRECTLY.

But via one degree of separation, it is okay to have a 22.5% exposure to something.

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28 Responses to Guest Post: feelthebern – More questions for the ANU

  1. Bruce of Newcastle

    When they say an enhanced index manager I suspect that is code for someone with a green investment index like this mob:

    “Both the ASX50 and ASX100 model portfolios are constructed around negative screens. Companies that are given a red rating – companies that ******** deems as being damaging to people or the environment – are excluded from investments. Investments are then made in companies rated yellow for doing no harm and green for positively benefiting people or the environment. The index is weighted by market capitalisation.”

    I’ve removed the name as I really don’t want to advertise such a company.

  2. Pete of Perth

    At least ******** include people as part of their happy happy matrix. Most rabid greens consider people a cancer on the environment.

  3. feelthebern

    Enhanced index = derivatives.

  4. Peter from SA

    Hahaha … very well picked up FTB. This is hilarious …

    (were there reports that ANU had $1bn under management? clearly that was wrong?)

  5. Talleyrand

    Investment dilettantes wasting generous donor funds. All for sweet fuck all change to the environment and their overall portfolio.

  6. iamok

    Bit like the major national nfp that gave an unsecured half mill loan to one of its directors for highly speculative investments in his own company. Then he subsequently blew it.

    Great fun playing grown-ups with other peoples’ money. (Hmm reminds me of some goose now happily gone). Lots of huff and puff pronouncements with very serious looks on all faces.

    But bugger all consequences when it inevitably stuffs up. Never mind – they just regroup and go again.

  7. cohenite

    I presume a copy of this excellent analysis has been posted on student bulletin boards around the ANU?

  8. goatjam

    I’ve removed the name as I really don’t want to advertise such a company.

    I doubt that being posted here would count as much of an advert, unless you think numbers, hammy and candy have massive amounts of money just itching to be invested “ethically”

  9. JohnA

    You quote from the website:

    The stocks to be divested represent around 5.1 per cent of the University’s Australian equity holdings and approximately one per cent of its total investment holdings.

    But I ask: where are “the University’s Australian equity holdings”?

    And I ask: what is the line “Investments – Direct Share Holdings”?

    Could they be huffing and puffing over 5.1% of just 32K???

    I mean: could I have mis-read those two items by considering them to be the same? OR could they really think that we could be that stupid? The latter is so damnably, insolently supercilious, that I hope it is the former…

  10. Leigh Lowe

    Enhanced index = derivatives.

    Holy shit!
    $200 meg fund controlled by academics about to play derivatives.
    And …. cue “Jaws” theme.

  11. Leigh Lowe

    And I ask: what is the line “Investments – Direct Share Holdings”?

    I am guessing that is non-listed private stuff.
    Probably play money into one of he VC’s bright ideas.

  12. Ubique

    The deranged commie eff-wit social engineers running Healthways in WA must be ANU graduates.

  13. feelthebern

    Ultimately, if they want to preclude investments from their portfolio, they can do whatever they want.
    Boards can be removed.
    My gripe is their holier than thou attitude.
    They pat themselves on the back & will be the talk of the town in lefty circles this weekend.
    But ultimately, they now will have a bigger exposure to the very companies they are trying to avoid.
    They can’t be that dumb not to know that.

  14. Fred Lenin.

    Surely these muppets are not “teaching”students who are paying for an education? (Even oh HECS ,they are paying ) This is the NATIONAL University?

  15. davefromweewaa

    FTB,
    Divestment is just slacktivism with other peoples money.
    They should try going without the commodities these evil companies produce and see how they get on.

  16. Leigh Lowe

    Every time I see a numpty investor in the marketplace behaving irrationally I cheer them on … go for it … advantage rational investors.

  17. Tim

    Maybe this is the thing? The comment that universities are unloading their fossil fuel investments?
    Probably not.
    That Cold Fusion just won’t go away…

    E-Cat

  18. 3d1k

    Well done. Keep the pressure up.

    ‘Those that can, do, …”

    With due respect to academics in this place.

  19. Stevos

    Good on the ANU. Fuck Santos.

  20. Dan

    Yair, fuck Santos. Them wankers are paying people 4 times the minimum wage to get gas out of the ground. The Bastids

  21. Baldrick

    Well researched FTB.
    Seeming is more important to luvvies than doing.

  22. feelthebern

    Nah, 100% FtB.
    Sinc picked up an error in the first draft.
    After a quick edit it was all rock’n’roll.

  23. Combine Dave

    Good on the ANU. Fuck Santos.

    Blair’s Law?

  24. goatjam

    I wouldn’t be holding the E-Cat up as the future saviour of the world. That thing is 100% scam.

  25. JohnA

    goatjam #1473783, posted on October 11, 2014 at 10:00 am

    I wouldn’t be holding the E-Cat up as the future saviour of the world. That thing is 100% scam.

    And the trouble with all those “proof of concept” models is that they rarely if ever scale up to mega-industry level.

    Nor to greenies ever think how long it took to deploy what we have now – power stations and the grid plus reticulation, and petroleum fuel from large-scale refineries plus the distribution network. They think that these new ideas can be instantly installed into the economy, and immediately replace “dat ebil coal and dat ebil oil stuff”.

  26. Julian McLaren

    Enhanced index is often a term used when the 3 factor (Fama and French) model is ultilised. I.e. Dimensional Fund Advisers.

  27. Tom

    ANU vice-chancellor Ian Young has a classic hypocrite’s defence of the mooching class and ANU’s divestments jihad in Monday’s ShakeMyHamas.com:

    The real debate in climate should be about producing cost-effective alternative energy. Sticking our collective heads in the sand and ignoring a changing world will ensure we do destroy jobs.

    So where are all the ANU research programs dedicated to cost-effective commercial energy technologies that don’t require government subsidy? Not a word. Mooch mooch mooch.

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