Saw article Barry is suing our BOT
- Thread starter Sharkies
- Start date
Good question. For decades after graduation I thought State College was the greatest place on earth. My wife and I talked about retiring there, even though she is a Pitt grad. We sent our two daughters to Penn State. We drove up from Pittsburgh a dozen, or more, times a year. We donated money, and time. Then, for a half dozen reasons, which I've mentioned here before, my love waned. Sandusky, the treatment of Joe, falling academic ratings, the clown assembly known as the Board of Trustees... Now I've reached a point where I just don't give a damn. I return to this Board because of the people here and the many non Penn State threads. I wish I could get the passion back but I know it is gone forever.
You're assuming these are the same assets from the same asset managers. if the products they are pushing for generate outsized returns, you're chasing the return not the fee.
There's a lot of bespoke products out there that only certain asset managers can put together via their own relationships.
Couple things:
1) PSU (along with Pitt and Temple and Lincoln) is NOT subject to FOIA. So one can cross that off the list.
Agencies Subject to the Right to Know Law – PaFOIC
I don't know why anyone would make a claim to the contrary, without first knowing that it is specious.
2) Here is PSU Endowment Performance vs S&P (over the last 15 years):
What good things could Penn State do with an extra $2.3 billion in the endowment? – BARRY FENCHAK
There is a spreadsheet you can link to for the numbers:
Penn State Endowment - Google Sheets (S&P 500 outperforms the endowment by a bit over $2 Billion over that time frame. S&P 500 outperforms, IIRC, in 11 of 15 of those years)
3) All that said, the Filing is to compel the sharing of the information, not to mandate anything wrt the management of the endowment (some folks appear to want to comment on something, without reading that thing)
1) PSU (along with Pitt and Temple and Lincoln) is NOT subject to FOIA. So one can cross that off the list.
Agencies Subject to the Right to Know Law – PaFOIC
I don't know why anyone would make a claim to the contrary, without first knowing that it is specious.
2) Here is PSU Endowment Performance vs S&P (over the last 15 years):
What good things could Penn State do with an extra $2.3 billion in the endowment? – BARRY FENCHAK
There is a spreadsheet you can link to for the numbers:
Penn State Endowment - Google Sheets (S&P 500 outperforms the endowment by a bit over $2 Billion over that time frame. S&P 500 outperforms, IIRC, in 11 of 15 of those years)
3) All that said, the Filing is to compel the sharing of the information, not to mandate anything wrt the management of the endowment (some folks appear to want to comment on something, without reading that thing)
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So? As pointed out PSU could have done just as well in AIVSX
If Penn State returned the -18% the S&P did in 2022 I'm damn sure you would've lost your damn mind and had a Facebook video crushing the school for not being diversified. For a guy who says his only filing is to compel the sharing of information you're doing a hell of a lot of backtrading.
Were you max long stocks in 2023?
I know what you're trying to finesse by benchmarking to 2008 by the way. Very convenient starting point.
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2008 is the furthest back PSU's public records go. But, yeah.
NorthernState absolutely demolished in this thread, and proving exactlt why we needed a lawsuit.
And while he doesn’t know, it’s certainly fair for a member of the board of Trustees to know…we could be killing it, and I’d still be in favor of being transparent with other board members. I applaud someone that actually acts questions and tries understanding what’s happening, rather than giving a rubber stamp.
It's also smack in the middle of a financial crisis and the recent market lows. Which is why a cost-savings analysis benchmarked to that period is pretty rudimentary and probably not a great way to measure returns. You could've chosen an analysis covering the past 10 years if you wanted.
Outside of that, what's the point of that 'fee savings' argument? Your entire premise with that post is 'Penn State should be long an index, pay minimal management fee and live with the results and only pay 75 bps'. You're also assuming the same returns are achievable at your magical 75 bps level.
You're trying to pick apart the returns, motivation is crystal clear.
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Barry is on the board only because a significant number of alumni do not trust the board.
Fighting for less transparency, as the board constantly does, isn't going to remedy that.
We know he is abrasive, but enough of us decided that abrasive was exactly what we needed that now the board is going to have to deal with him- tough luck for them.
And if it makes you unhappy, tough luck for you.
Fighting for less transparency, as the board constantly does, isn't going to remedy that.
We know he is abrasive, but enough of us decided that abrasive was exactly what we needed that now the board is going to have to deal with him- tough luck for them.
And if it makes you unhappy, tough luck for you.
And if this whole exercise ends up with a loss because his interpretation of the law isn't the same as a judges, is it 'what was needed' or was it a complete waste of money where nothing valuable was accomplished?
I again ask if he was stonewalled because of his approach, general demeanor and lack of trust that he wouldn't completely spin the information he was given, leak it publicly (as he's done in the past) which would jeopardize existing non-disclosures. Based on his completely ridiculous fee analysis exercise (which anyone with a financial background would tell you ignores the mandates that endowments have), I'd argue he's already playing an angle outside of 'transparency'. He very clearly has an alternative agenda by benchmarking to S&P from the lows, arbitrarily deciding what the fee structure should be without benchmarking to peers, and completely ignoring the firestorm that would emerge if PSU was just 100% exposed to stocks and ate **** (p&l wise) in bad years.
Barry can say this is about transparency all he wants but he very clearly has an ulterior motive by framing his argument this way, despite what he says.
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I find myself pretty close to this view, while being thankful for the good education and experiences I had back then....
I’ve already shown you better results are achievable while paying lessor in fees
And I already pushed back on it because it, again, is just a proxy for being long dividend stocks. It's a single strategy and completely undiversified. So, again, in 2022 you'd have been down 15% on it and getting inquiries from guys like Barry into PSU's gross misuse of institutional funds.
As it was, PSU's endowment fund was flat in 2022 benchmarked to -15% in AIVSX. And I didn't hear a peep from anyone then about 'underperformance'.
You guys are not making serious arguments right now.
And if this whole exercise succeeds, was something accomplished if the board needs to think twice in the future about following the law and actually showing some transparency? I'd hope so.
Wouldn’t the play be to give him the information and tell him it’s confidential? Have seen enough boards/committees/working groups with varied and sometimes competing interests to know the smartest leaders kept their ‘wildcards’ close - not ostracized. I think we all know Barry’s past and hence the former reluctance to support him, but he’s been very transparent and open with everyone here and I do not think he is the type to leak something if told otherwise. We also know he is near single minded when it comes to Penn State governance but as someone said earlier, and paraphrasing, if you have a board of 32 and they all agree, 31 of them are unnecessary.
It would then largely depend on the cascading impact of the decision. It could cost the university endowment large sums of money if we no longer are able to hold confidentiality based products as an institutional buyer. It could open PSU up to a new range of lawsuits from product managers themselves and/or require divestment from the products if Barry advertises them.
It could force transparency and cost significantly more than PSU would in theory 'save' from being at Barry's pie in the sky argument of non-diversified low fee situation, which is outside of the norm of any university endowment I know.
It effectively turns PSU into a passive long stocks at all times using Barry's analysis. Which is why benchmarking to a single non-diversified index is so incredibly childish.
As a principle I generally believe transparency is a good thing, but if you're getting way better returns on bespoke products that require confidentiality, transparency has a very real cost and could end up costing the endowment significantly in the long run.
Barry's whole argument (based on his own analysis mind you) boils down to 'you should be long stocks despite YOY volatility in the name of transparency to save on a fee'. Barry's making the argument the endowment will perform better if we just do it 'his way' and he's covering that argument in a transparency argument to get there, Despite his posts to the contrary.
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I can't imagine how you could possibly be more thoroughly and completely wrong (and, clearly, ignorant of the parameters of the lawsuit).
I will leave it at that.
Hey man, you put the benchmarks out there for a reason. You made the fee argument for a reason. Can't have your cake and eat it too. I very much see through what you're attempting to do here.
I flat out don't trust your ability to keep confidentiality based products confidential and your preconceived notions of 'underperformance' and not benchmarking to peers make it clear.
Go prepare yourself for your board meeting.
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By the way, in case anyone cares about publicly available endowment performance in cal year 23, Penn State outperformed 15 of 20 listed here. Including a beat of Harvard, Princeton, Yale, MIT, Michigan, Notre Dame, Northwestern and Virginia to name a few.
If Barry would have just left it as 'I am believe I am entitled to access and Penn State doesn't' he would've had plausible deniability. Instead he says Penn State's endowment is underperforming because he believes the change in fees is too high and he wants to investigate it because 'he knows what he's looking for' when it comes to 'malfeasance' that he definitely isn't making an accusation on (wink, wink).
He couldn't help himself.
If Barry would have just left it as 'I am believe I am entitled to access and Penn State doesn't' he would've had plausible deniability. Instead he says Penn State's endowment is underperforming because he believes the change in fees is too high and he wants to investigate it because 'he knows what he's looking for' when it comes to 'malfeasance' that he definitely isn't making an accusation on (wink, wink).
He couldn't help himself.
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In the interest of my own time and Barry's 'leaving it at that', I too will 'leave it at that'.
@NorthernStatePSU I don't know if you're trying to make it feel this way, or even if it truly is, but you're making this sound VERY personal for you. i mean VERY VERY personal. it's one thing to disagree, it's a completely different thing to make everything a hill to die on.
just FYSA
just FYSA
NorthernState - it is Depressing that you have attempted to 'control' this conversation with your assumption that the context is about 'Fees' and or the complex confidentiality of certain products or product managers. If you are of the ilk of money managers that have allegiance to stock turnover begets commissions, then greater information will tell the tale of possible profits not attained. If not, and your approach is long term, then maybe the client will be favored in all computational analysis. What seems to be the most important issue is ---- Information ! Not the purview of only certain select favorites. Therefore -- Available to all BOT members ?
BTW - we are from the Northeast - we are Assertive, not abrasive or aggressive in seeking greater information to solve problems.
It has been very well known for many years - the PSU BOT is and continues to be a legislature nightmare of old time politics vested in the 1800's. It is bloated and over populated with non-performing people who are not expert in BOT over-sight 'Performance.'
A Fraternity Brother and friend of mine is Ben Novak - former BOT member who could share some insights on the making of BOT decisions.
As an aside - I have told Barry and VChair David that I will not donate until Nellie and her pet project DEI+b is totally eliminated. Evidently there are others who do not care about woke, or possibly playing favorites. Performance is what matters most.
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I would argue the only one making taking this to an extreme is Barry, and it’s very obvious from an outside POV from someone who also thinks the BOT structure and way of operating is a total joke and has been for a long time.
Like he said earlier, “If Barry would have just left it as 'I believe I am entitled to access and Penn State doesn't'“ then there’d be an argument.
The BOT is bad. That doesn’t mean Barry isn’t being a disingenuous chaos agent (again) as there are several indicators and peer comparisons that have been made evident to everyone in this thread whose stance on this doesn’t boil down to “BOT bad; therefore, Barry good.”
I think he must be one of the private equity guys PSU is using and trying to justify his fee
He/she definitely doth protest too much, Barry getting too close most likely.
No question !
I just think Barry is full of it and I have numbers and examples that he provided to prove that his motivations are suspect.
As I said, if this was a transparency argument and it's a simple squabble over it? Fine. But that's not what he's made it.
I have no affiliation or power with regard any financial decisions made by Penn State. I am not in the private equity space, never have been and never will be. I don't manage any of the endowment funds and never will.
I have zero affiliation with any board member, receive zero money from the institution (rather I donate to NLC and NIL endeavors) and have absolutely ZERO interaction with anyone on the board. But I can definitely read and understand rate of return and why being just blanket long stocks isn't the wisest move when managing an endowment.
Basically, I just see right through what Barry is doing here.
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I haven't even said I think the BOT is good at their jobs (I have plenty of issues with how they operate). But when you've got folks hellbent on a pre-determined outcome, any time you push back you're immediately assumed to be associated with someone on the 'other side'.
Barry and his group are used to pointing the criticism outward, very clearly don't like it when it's turned back on them because there's huge gaps in the logic and case they presented.
I took Barry's argument that he made (with his own words on his own website) and pushed back. That's it. I don't think Barry's doing much good from his alumni elected position on the board either, but as he's a member of the BOT he can be lumped in with some of the many issues I have with the way the entire BOT operates.
This is spot on. Give him the info he is entitled to have. Sanction him if he misuses it. This is not rocket science
And you can say we should trust the board- we don't, despite what you say.
I didn't say that. I said Barry is being disingenuous of his true motivation here. I said returns less fees beat the street and provided examples thereof.
I also said this could be a situation where his involvement is in breach of confidentiality clauses as part of the suite of offers available to the institution and signed by the members of the endowment committee (which he is not a member of as current).
Dude - lawsuit already filed, hope you're ready.
turn out the lights, the party’s over
Please explain how you know someone else's motivation. That is truly an amazing talent.