07 Nov 2014
Investing for the Long Term in EducationTopics:
Kim Lew (MBA 1992) is chief investment officer of the Carnegie Corporation of New York, where she manages $3.2 billion in assets for the corporation. In this interview, Lew discusses how she works to keep close to the original mission of the founder, Andrew Carnegie, who believed that education was important to have a fully engaged society.
“I was at Ford for 13 years and I left to join Carnegie about seven years ago. It’s one of the few foundations that I’ve seen that actually really keeps close to the original mission of its founder and appreciates the work that he originally did. Originally, he worked on libraries. As you know, most of the libraries in the United States and many in other parts of the Commonwealth are Carnegie-funded libraries. We continue to believe at Carnegie that education is important to make sure that we have a fully engaged society and everyone has the opportunity to be successful
“Andrew Carnegie was an immigrant, so we continue to work on civic engagement and strengthening our democracy. And he also believed that, if people spoke to each other more and understood each other more, then we could end wars. So that’s our international peace-and-security grant-making efforts. We also continue to do libraries, but in Africa, and more recently higher education in Africa.
“It is an especially challenging effort, given that we are legally required to give away 5 percent of the endowment every year. So, ensuring that we continue to grow in perpetuity, or exist in perpetuity, means being able to produce that 5 percent plus inflation, which is a bit challenging in a low-interest-rate environment.
“I think that we try to approach investments much in the same way that the corporation tries to approach philanthropy. It really is an effort to think about what you want to accomplish in the long term, what the goals are in the long term, and then working your way back to what efforts and what strategies you have to implement to get there. We have a long-term goal, not a short-term goal, of producing 5 percent plus inflation, so we have an 8 percent hurdle over a long period of time. We don’t think about how we do that in any one year. We think about how we do that over the course of 10 years. And so it means going into new markets, it means looking for inefficiencies, it means building a team that we know will change and alternate over time, but building the processes that make sure that anybody who comes into the team can operate and feel really good about their contributions to the team.”
Find HBS alumni at Carnegie Corporation
(Published November 2014)
Class of MBA 1992, Section G