Some of the world's top schools of higher education have taken a particular interest in the world of investing. This should surprise few as many schools have been investing in stocks and bonds for quite some time. What is surprising is the particular stocks they invest in and the possible risks they face in the long term.
When a person thinks of Oxbridge colleges in England, there is very little chance that they think of online poker investments. But thanks to savvy investing, the university's last women-only college capitalized on some of the London Stock Exchange's listings of the world's biggest online gaming companies.
With shares jumping in value every day, St Hilda's College (OxFord) made a pretty penny thanks to the online poker industry's enormous boom in growth.
Not everyone however is pleased that schools are making ties with an industry that has a dubious past. Despite the fact that poker has found legitimacy in many circles, including the financial world, there are people intent on lobbying against the investment strategy. The National Union of Students has taken the position that online gambling will tempt poor students and also cited the fact that young women account for a third of online players as reasons against poker-related investments.
The college however feels it has done nothing wrong according to a statement made to the Times Higher Education Supplement (UK). "The college has a socially responsible investment policy that was agreed by the fellows of the college after discussion with student representatives."
Vice-chancellor of Cambridge, Allison Richard is and advocate of this type of enterprising investing. She believes that English universities should adopt investing policies similar to those used by schools in the United States. Following the path tread by U.S. schools, Richard is set to begin a international fundraising drive to boost Cambridge's 3 billion pound endowment fund with the idea that donors will want to know what their universities are doing to make the most of their investments.
Richard believes the statistics speak for themselves. Last year, U.S. universities reported an average of 18 percent return on their investments, the highest since 1998. In direct contrast, Cambridge has averaged roughly 5 percent return on its investments over the past 10 years.
Despite posting big numbers overall, U.S. schools have also taken it on the chin in the investing game and have lost to bad investments as well. The University of California recently celebrated a $2.4 billion settlement with a Canadian bank stemming from the bankruptcy of the Enron Corporation.
The university lost $145 million as a result of the scandalous actions of Enron employees and is currently acting as the lead plaintiff because of its size, resources, and stake in the outcome of the case.
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