UA Foundation Ready For Bulls

Jerry Moore knows he has a tough job. On New Year’s Day, he became executive director of the University of Arkansas Foundation, which raises money for academics at the UA system of colleges and currently has more than $600 million in assets.

Fund raising is hard enough when times are good, but during an economic downturn, it can be a bear.

“This is the longest and deepest bear market since 1929-32,” Moore said. “But all indications are that later this year, things may turn around.

“My No. 1 job is to make certain that the university Foundation is positioned through proper asset allocation to maximize our opportunities when the market turns. And I don’t know who will call when that will be.

“I think there is some caution, but people are starting to get back into the market, to get ready for the upturn. Everyone continues to believe that over time, the stock market will do better than the bond market.”

Moore, who was a third-string center for the Arkansas Razorbacks football team in the early 1960s, said the UA Foundation has about 65 percent of its assets in the stock market. The rest is in bonds, cash and real estate.

But when the Foundation’s 22-member board meets — or the seven-member Finance and Investment Committee — they don’t talk about stocks.

“I’ve never heard a stock mentioned [in a meeting],” Moore said. “They talk about allocation … We don’t pick stocks. We only pick [fund] managers. We’re not involved with stock selection in any way.”

Moore said the Foundation board usually selects fund managers who are a bit on the conservative side.

“We are looking for the long haul,” Moore said. “We don’t make big bets on small companies, and we don’t make big bets on stock tips.”

The board members also talk about the performance of fund managers. The Foundation board axed Peachtree Management of Atlanta last fall.

“You diversify, you hold your managers to a higher standard, and you make sure they’re complying,” Moore said. “We manage the managers. We set the target for the managers. If they don’t make the targets, they’re dismissed.”

No ‘Negative Surprises’

To make sure the fund managers are doing a good job, the Foundation board measures their performance against various indexes. The Foundation’s large-cap core/value equity managers, for instance, are Institutional Capital Corp. of Milwaukee, Wis., and Montag & Caldwell of Atlanta. They are expected to outperform the Standard & Poor’s 500 index after five years and the Russell 1000 Value index after three years.

“We tell them what we want to track them against, and they have to beat that or we would just buy the index,” Moore said, noting that the fund managers receive a commission that could range from six to 100 basis points (1 percent). “Are they not doing what they said they were going to do, which would lead to negative surprises? We look at them very closely monthly against the index. We watch it carefully, and Mercer watches it carefully.”

Mercer Investment Consulting of Atlanta is the UA Foundation’s consultant. Among other things, Mercer advises the board on bond manager selection. The Bank of New York serves as the Foundation’s custodian of funds.

Moore said the Foundation usually examines a fund manager’s track record over the past 10 years.

“We like to see that they’ve been around, that they’re large, that they have a tendency to do what they say they’re going to do,” he said.

Although the fund managers are closely monitored, Moore said, “we’re trusting them.” He referred to it as “the prudent man rule.”

The Foundation has done well despite a three-year decline in the stock market, the terrorism of Sept. 11, 2001, and the war with Iraq. But $50 million donations in 1999 and 2001 have buoyed the asset totals. The UA Foundation had a 4.5 percent decrease in assets in fiscal 2002, but a $300 million gift from the Walton Family Charitable Support Foundation of Bentonville almost doubled the UA Foundation’s assets for fiscal 2003, which will end June 30.

The Finance and Investment Committee, which makes the decisions concerning fund managers, meets twice monthly by telephone and five or six times a year in person. All committee members receive a monthly report to keep them informed on how the portfolio is performing.

If the S&P index is up 100 points and the UA’s large-cap stock portfolio is down 200 points, “we want to know why,” Moore said.

The Finance and Investment Committee includes Robert P. Plummer and Jane Wilson, both of Little Rock; Mary Ann Greenwood and Charles Scharlau, both of Fayetteville; Freddie Black of Lake Village; Rick Chapman of Bentonville; and Frank Oldham of Jonesboro. Lewis Epley of Eureka Springs, who will become chairman of the Foundation next year, also attends the committee meetings. Greenwood is currently chair of the UA Foundation.

Moore said 60 percent to 70 percent of the Foundation’s assets are from the UA campus in Fayetteville. The rest are from the Agricultural Development Council, Arkansas Cancer Research Center Foundation Fund, Little Rock Foundation Fund, Medical Sciences Foundation Fund, Monticello Foundation Fund and Pine Bluff Foundation Fund.

Center of Attention

Moore replaced David Malone, who served as director of the UA Foundation from 1991 to the end of 2002. Malone left that job to head the Arkansas Teacher Retirement System in Little Rock.

Malone’s background was in academics and politics. He served as state senator from Fayetteville from 1985-2002 and state representative from 1981-1984. Malone was mayor of Fayetteville from 1979-1980. He was assistant dean of the UA law school from 1976-1990 and assistant professor of accounting from 1972-1976.

Moore grew up in Harrison and graduated from the UA in 1962. He attended college on a football scholarship but mostly played third-string center, lettering one year. Moore jokes that he hopes he makes more of a contribution to the UA Foundation than he did to the Razorback football team in those years.

During college, Moore had a blind date with Gail Blossom of Fayetteville. Her father was superintendent of Fayetteville schools and was superintendent in Little Rock during the Central High crisis of 1957. Moore married her the year he graduated from the UA.

Moore went to work for Aetna Life & Casualty in 1963 and spent almost 30 years with the life insurance company. While with Aetna, Moore served for three years as assistant vice president, managing Aetna’s Fixed Income Department. From 1982 to 1988, he was vice president of the company’s pension and financial services and president of Aetna Capital Management. He served from 1989 to 1991 as chief operations officer of Aetna Health Plans at the company’s headquarters in Hartford, Conn. Along the way, Moore and his wife lived in Little Rock, Fort Smith, San Antonio, San Francisco and Atlanta. His two daughters grew up in Hartford.

Moore retired from Aetna in 1991 and began working as a volunteer for a football program at his daughter’s school.

David Banks, chairman and CEO of Beverly Enterprises in Fort Smith, grew up with Moore in Harrison and heard he had retired. So Banks asked Moore to move to Fort Smith to be executive vice president of strategic planning and human resources at Beverly.

Moore moved to Fort Smith to start his new job in 1992. He retired from Beverly in 2001. While with the nursing home company, Moore helped Beverly sell its long-term patient-care business based in Franklin, Tenn.

In November, the UA Foundation board asked Moore to come out of retirement a second time, this time to head the Foundation.

“I was asked to replace David, and that’s hard to do,” he said.

Moore said his investment philosophy is “very similar” to Malone’s, but that doesn’t really matter because the fund managers make the investments with direction from the Foundation board.

“I convene the committee,” Moore said. “I’m just the caretaker.”