A partnership between Princeton University and the New Jersey Educational Facilities Authority (EFA) will expand opportunities for colleges and universities to invest with diverse asset managers. The collaboration is one example of Princeton’s supplier diversity initiative to support more businesses owned by people of color, women, veterans and members of the LGBTQ+ community.
The approximately $430 million bonds were issued through the EFA and closed on April 8, 2021. The financing represents the largest transaction in EFA history.
Princeton worked with EFA to ensure a portion of recent bond proceeds is invested and managed by a diverse-owned asset management firm. Ramirez Asset Management of New York has been selected to manage a substantial share of the bond proceeds, with PFM Asset Management separately investing the balance.
The appointment of Ramirez Asset Management is historic. It marks the first time EFA worked with an educational institution (Princeton) and an investment manager (PFM Asset Management) to ensure a portion of bond proceeds are invested by a diverse-owned firm.
“This is a major milestone for Princeton University and for the New Jersey EFA,” Princeton’s Associate Vice President for Treasury Services Tim Graf said. “Princeton is in a unique position as a well-respected leader in higher education and as a global institution. It is our hope that this model will encourage other universities to similarly think creatively, expanding existing relationships with minority, women or veteran owned firms.”
Princeton’s Vice President for Finance and Treasurer Jim Matteo said the University’s ongoing commitment to address systemic racism includes diversifying with whom it does business. Cultivating new partnerships with diverse-owned financial firms is one goal of the Office of Finance and Treasury’s Supplier Diversity Plan.
“The University is committed to forging financial partnerships that will not only have positive impacts on growing and preserving our financial resources, but also help build wealth in diverse and under-represented communities,” Matteo said. “I am proud that Princeton’s commitment to diversity extends to this aspect of addressing structural inequality.”
New Jersey Secretary of Higher Education Dr. Brian Bridges applauded Princeton’s and EFA’s partnership.
“I applaud these efforts to incorporate equitable, inclusive policies that not only bolster New Jersey’s economy but can serve as a model for other institutions considering how to implement diversity goals, particularly for women and communities of color,” Bridges said. “This commitment to and appointment of minority, women and veteran owned businesses in these roles is key to reinforcing these principles and signifies major steps in effectuating change in the bond fund asset management arena.”
Sam Ramirez Jr., president and CEO of Ramirez Asset Management (RAM), said his firm looks forward to working with Princeton.
“I applaud Princeton University’s commitment to the inclusion of diverse firms in its investment management needs,” Ramirez said. “We are honored to partner with Princeton and appreciate their support of minority-owned business enterprises and overall commitment to diversity, equity, and inclusion. RAM is part of the oldest Hispanic investment firm in the U.S., with a 50-year-history and is proud of our long-term track record of investment outperformance. We look forward to our relationship with Princeton and believe this type of partnership, which facilitates growth for RAM and Princeton, can serve as a model for other institutions.”
NJ EFA Executive Director Eric Brophy said Princeton had approached the state authority about “how we could help them realize their goals for hiring diverse asset managers. We worked with our investment adviser, PFM Asset Management, to create a new system that will not only meet Princeton’s needs today, but also meet the needs of our other client institutions as they work to align management of their investments with their missions.”
Brophy added: “Governor Murphy has committed to building a stronger and fairer New Jersey, and the Authority sees diversity in asset management as one way to level the playing field.”
The inclusion of Ramirez Asset Management as a sub-adviser in the Princeton issuance was not the only diverse-owned business included in the bond issuance, as both the financial printer and the verification agent used by EFA were diverse-owned firms. Additionally, the underwriting firms comprising the two winning syndicates for the bonds were among the most diverse in recent memory: of the 25 firms across both series, 13 were minority, women, veteran, or service-disabled veteran-owned firms. “The Authority has been using more minority, women, and veteran-owned firms in its transactions than ever before,” said Steve Nelson, director of project management at the EFA.
Stephen Faber, managing director of PFM Asset Management, said his firm was pleased to include diverse firms in EFA’s investment program. “PFM has long supported the promotion of emerging, minority and local managers,” Faber said.
The EFA is New Jersey’s primary issuer of municipal bonds to finance the development of campus facilities at public and private colleges and universities. The Princeton bonds issued through the EFA were authorized for the purpose of financing, in whole or in part, the costs of the acquisition, construction, renovation and installation of capital assets. This, in part, includes campus construction that will support the expansion of the undergraduate student body.
“The University is committed to growing our undergraduate student body to give more students an opportunity to earn a Princeton education, and these bonds will help support that effort,” Graf said.
The Office of Finance and Treasury worked with the EFA on the bond issuance and the selection of Ramirez Asset Management. This is separate and apart from the University’s endowment investments, which are managed by the Princeton University Investment Company (PRINCO).