The Oklahoma State University Foundation has approved the formation of Multilateral Endowment Management Company (MEMCO), a nonprofit investment management company responsible for providing advisory services to the foundation, affiliated nonprofits and other philanthropic organizations, Foundation CIO Ryan Tidwell said, in an e-mail.
Tidwell will become the ceo and cio of MEMCO and the Stillwater, Okla.-based foundation’s five investment staff members and three operations professionals will also join the investment management company when launched, according to an announcement. Tidwell noted that the management company has no plans to hire additional staff members in the near term.
During Tidwell’s tenure, the foundation’s portfolio has grown to more than $900 million from $500 through fundraising campaigns and strong investment performance, according to the announcement, which notes that the foundation’s investment office has exceeded $100 million in outperformance through active management.
The OSU Foundation and the McKnight Center for the Performing Arts at Oklahoma State University, which have more than $1 billion in combined assets, agreed to be MEMCO’s first supported organizations, the announcement states.
All supported organizations will have their assets segregated and invested in their names and they will not be pooled, Tidwell said.
The greater scale of MEMCO will allow the organization to negotiate preferential fees and terms with investment managers, recruit and retain top investment talent and disperse fixed investment expenses across a larger asset base, reducing costs on a percentage basis, according to the announcement.
“After seven years of strong execution, the establishment of an investment management company is the next step in the evolution of our investment office,” Tidwell said, in a statement. “Establishing MEMCO will maximize our ability to achieve our vision, which is to be a leading investment function and a benchmark for institutional investing in the central United States.”
MEMCO, which will launch in the next couple of months, expects supported organizations to “benefit from true alignment” as they share actual investment expenses on a pro rata basis, according to the announcement, which notes that investment expenses will decrease for all clients as new ones are added.
MEMCO’s clients will also receive representation on the company’s governing board, which will provide “unparalleled transparency into and oversight of the investment process,” the announcement states.