Watch the Regents' Investments Committee of May 16, 2023 (and its interesting deflections)

We noted that the material provided in advance to the Regents' Investment Committee included - as it always does - rates of return over various durations on the pension, endowment, and other funds. In our posting of May 11th, we noted substandard investment returns were being reported. This is what we said:

...The pension fund and the endowment fund have different mixes of assets in their portfolios, each mix presumably assumed to be appropriate for the two purposes. According to the table available in the detailed agenda, the pension return is below the benchmark for all durations shown up through the 5 years ending March 31.

Source: https://regents.universityofcalifornia.edu/regmeet/may23/i2.pdf (p. 3).

The returns for the endowment are below benchmark for durations through 3 years...  Will any Regents ask questions about the below-benchmark returns? (Boldface added)

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Source: https://uclafacultyassociation.blogspot.com/2023/05/investment-performance-above-or-below.html.

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Short answer to the question above: No. 

So what did happen at the meeting? In public comments, there were remarks on staff burnout and pay, staff shortages, hiring undocumented students, Blackrock and Blackstone, the student-worker strike, affordable student housing, antisemitism, student food needs, Hawaiian telescope, UC fossil fuels emissions, climate change, and disabled student funding.

The official program then opened with an approval of a policy change allowing somewhat longer duration investments in the working capital funds. Lots of interesting material was presented about diversity in the investments industry, medical advances at Irvine, and artificial intelligence. In the midst of these interesting presentations, there was a brief review of investments performance. However, the charts that were put on the screen showed absolute amounts in the portfolio over time, but not the benchmarks. In principle, the committee members had the pre-meeting materials and could have asked about the below-benchmark returns. No one did. 

Again, we point to the role of the Regents as trustees of the pension and endowment. Isn't the prime function of this committee to ask critical questions about the earnings of those funds? There is nothing wrong with taking up topics de jour such as artificial intelligence. But such topics should not be deflections from the prime function. Surely in a meeting that ran over three hours, the committee members should have ample time to ask the critical questions.

You can see the meeting at:

https://archive.org/details/investments-committee_202305.

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And by the way, the segment on artificial intelligence was interesting. Below is an excerpt. The artificial intelligence (AI) presentation was by UC-Berkeley Professor Michael Jordan. In response to a question by Regent Hernandez, Jordan criticized the sci-fi hyping of AI and slammed Geoffrey Hinton (formerly of Google), Elon Musk, and Sam Altman as misrepresenting or not understanding the technology.

Or direct to https://www.youtube.com/watch?v=AygJUbwCwJc.