The job of Ohio State's eventual chief investment officer just got a lot tougher.
Because of problems in the national and state economies, including a projected $733 million to $1.9 billion budget shortfall for Ohio, it might be harder for the CIO to meet the goals of OSU officials for the university's long-term investment pool.
Ohio Gov. Ted Strickland said he would have to make tough choices to combat the projected deficit. So far OSU's tuition freeze is off the list of programs the governor will cut to balance the budget.
"What I'm trying to do is manage this situation in a way that protects our priorities in terms of Ohio's future," the governor said to The Cleveland Plain Dealer. "I think our commitment to higher education, our commitment to expand health care coverage for our children, our homestead exemption for our seniors - those are priorities that I will do everything possible to protect."
The university wants the new CIO to increase the rate of return from 7.5 to 8.7 percent.
"It looks like in this next year we won't come close to that number but it is hoped that because of our asset allocation, how much we put in different areas, that it's not unrealistic to have a return of 8.71 (percent)," said Thomas Johnson, interim treasurer for the university. "It's the ultimate goal."
OSU started looking for a CIO in September when a request was issued to hire a search firm. In December, the university hired executive search firm Hudepohl & Associates. On Thursday, Gary Hudepohl, the company's founder and director, said in a phone interview, a position profile should be approved in about a week. The position profile will outline various responsibilities that will meet the expectations of both university officials and stakeholders.
Some of those responsibilities might include developing and implementing new objectives and investment strategies and ensuring compliance with policies and procedures, according to documents obtained from the Office of Business and Finance.
"The market really determines the applicant pool," Hudepohl said, adding that the firm will advertise the position and perform a targeted search.
As of June 30, the university manages $2.3 billion in investments. Investments are broken down into five funds: university endowment funds, foundation endowment funds, maintenance and renewal funds, operating funds and the president's strategic investment fund.
Johnson said it is unlikely the gifted portion of the university's long-term investments, the $1.6 billion pool between the university and foundation endowment funds, would be used to offset a possible jump in tuition. This is because donor restrictions predetermine how gifts to the university can be used.
Associate Treasurer Alvin Rodack said the Ohio State Board of Trustees might increase the investment payout to help students with tuition, but "it doesn't necessarily solve the problems of replacing tuition."
Senior vice president for Business and Finance William Shkurti said in an e-mail he expected "to have a screening committee shortly to review resumes."
The Associated Press contributed to this article.
Lesly Hernandez can be reached at hernandez.171@osu.edu.
2008 Woodie Awards
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