Following tours of duty overseeing the pension funds for two large industrial companies — carmaker DaimlerChrysler from 1997 to 2003 and aerospace manufacturer Boeing Co. from 2003 to 2009 — Mark Schmid made the leap to the endowment world in July 2009. As CIO of the University of Chicago in the wake of the school’s losses from the financial crisis, the lifelong Midwesterner was tasked with creating a new, risk-focused endowment investing model. In 2010, Schmid and the school implemented the Total Enterprise Asset Management initiative, integrating the investment office with the finance and administration operations to marry the risk profile of the university with that of the largest asset on its balance sheet: the endowment. “You can’t just be long-term investors,” says Schmid, 55. “You have to be medium-term and short-term investors during a crisis.” The CIO hired a risk officer and a strategy officer, both with their own teams, to design a new investment structure that would balance the school’s $4 billion in debt with the now–$7.5 billion endowment fund, potentially resulting in lower returns in an up market. Despite the constraints, Schmid turned in a respectable 12.7 percent return for the year ended June 30, 2014, and a 12.6 percent five-year annualized return.
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