The university has created a new job to meet new demands. And it's hired someone new, with a
very new and different background, to fill the position.
Kathryn J. Crecelius, who now manages $2 billion of Massachusetts Institute of Technology's
money, has been appointed Johns Hopkins' first chief investment officer. She will take over investment strategy and management for a Johns Hopkins endowment that stood at $2.165 billion at the close of fiscal year 2005.
Crecelius has specialized at MIT in marketable alternatives, a category of investments that includes such relatively new instruments as hedge funds. Investments other than stocks and bonds are increasingly important for colleges and universities across the country, including Johns Hopkins, where they now account for almost 30 percent of the total portfolio.
But expertise in nontraditional investing isn't the only nontraditional line on Crecelius' resume. Before entering the world of finance, she served a previous term at MIT in an altogether different capacity: From 1978 to 1988, she was associate professor of French and coordinator of the French Department, helping to double course enrollments and publishing a book and 18 scholarly articles.
"It's not as great a leap as it appears, because the skill sets are very much the same," Crecelius said. Both scholars and investors, she said, do independent research on important and interesting questions, synthesize their findings and defend their conclusions.
The biggest differences, she said, are that professional investing requires mathematical ability and training-"which I had"-and fast decision-making.
"Investment work usually doesn't allow you the luxury of developing ideas over many years," Crecelius said.
She will begin work at Johns Hopkins by Oct. 1.
"This position represents an exciting opportunity to build an investment office for the 21st century," Crecelius said. "I am looking forward to joining one of America's pre-eminent universities as chief investment officer."
Crecelius has built the MIT endowment's marketable alternatives portfolio to $1.588 billion, taking it from 5 percent to more than 20 percent of the institute's $7 billion total endowment. MIT's endowment was the sixth largest among American universities in the most recent ranking, from fiscal year 2004. Crecelius also invests $429 million in assets from MIT's $2.3 billion retirement plan.
"Kathryn is particularly well-prepared for the CIO position at Johns Hopkins," said James T. McGill, the university's senior vice president for finance and administration. "Her intellect, experience in investing and broad-based view of the world, her commitment to higher education and the respect she has earned in the investment community all add to her ability to perform exceedingly well here."
At MIT, Crecelius has engaged and overseen outside investment managers and also investigated and recommended investment opportunities. She developed MIT's due diligence process and monitoring protocols for investments in hedge funds and other marketable alternatives. She also sits on a seven-person team that determines the overall allocation of MIT's investments.
At Johns Hopkins, which was 24th in the 2004 endowment ranking, she will head the university's first separate investment office staff. Until now, university investments have been handled in the Treasurer's Office, which also is responsible for such functions as cash management, external financing, bank relations, risk management and insurance.
"The job has gotten too big for one person, particularly given the increased complexity of the endowment's investments," said William Snow, Johns Hopkins' treasurer since 1989. "Most large endowments have a dedicated CIO. This is an opportune time to split the job, given that I am approaching retirement next year."
Between stints at MIT, Crecelius was a consultant at Cambridge Associates and head of risk in the Global Custody Network Group at Brown Brothers Harriman & Co. She held several positions from 1988 to 1995 at Bank of Boston and Baybank N.A. She is a 1973 summa cum laude graduate of Bryn Mawr College and earned her doctorate in French from Yale University in 1978. She won recognition as a chartered financial analyst in 1994.