Profiles of individuals in roles that support the work of the chief business officer—and who represent the majority of the Business Officer reading audience.
By Margo Vanover Porter
Despite the stock market's recent roller-coaster ride, the chief investment officer of the University of Delaware, Newark, has played a key role in doubling the institution's investment assets to $1.2 billion during his 12-year tenure. Competitive by nature, Mark Stalnecker still manages to keep his professional and personal life on an even keel.
“At the risk of sounding Pollyannaish, I think I have an ideal job,” he says. “The environment here is not really stressful. I'm fortunate to work in a collegial institution where people are supportive.”
Does he have to deal with investment committee politics? No. Competing agendas? No. Inflated egos overriding decision making? No.
Then it's no surprise that Stalnecker has energy outside of work for reading, playing golf, relaxing at his family's beach house in the Outer Banks, and rooting for his alma mater. “I'm a graduate of Duke University, where I keep very active,” he says. “I'm on the alumni association board, and I follow the Duke sports teams.” These activities help him keep his equilibrium while watching the market's dizzying spirals.
When investing, what is more important: a strong stomach, an analytical mind, or lots of luck?
As an investment professional, I almost have to say an analytical mind, or else anybody could start flipping coins. Even though the markets can be irrational from time to time, you need an analytical basis for making decisions based on an asset's worth. That's really the only way you can keep anchored and know when to buy and sell.
During your 12 years at the University of Delaware, have you seen a shift in investment strategies by higher education?
Yes. The biggest transformation took place prior to the so-called crash of 2008 when universities of all sizes began adopting an endowment model using private equity and other alternative investments. When the crash hit, many institutions found themselves with unexpected liquidity issues.
What should institutions do during a stressed market?
Not panic. It seems natural to try to get as liquid as possible, which would cause you to sell at the worst possible time—at the bottom of the market. Don't. Try to adhere to your long-term asset allocation strategies. Rebalance.
That being said, if your endowment is responsible for a large portion of your operating budget—say for more than a third—you have to be more cautious in how you invest.
What advice do you have for business officers who are nervous about their institution's portfolios?
Look at the asset allocation and make sure assets are diversified. Adhere to your investment policy. Understand what drives your institution's liquidity and make sure you have enough liquidity to meet the needs of your institution in a pressure situation. Understand what can happen to your funding sources if you are relying on debt financing.
What have you found to be most useful in keeping your professional edge?
Staying informed. I don't rely only on individuals with whom I agree, even though that may be comfortable. I try to get information from a variety of sources, which keeps my mind active and me aware of different viewpoints in the marketplace. Just like you want diversity in your asset allocation, you need diversity in your information sources.
Let's say the Duke Blue Devils are playing the Delaware Blue Hens. Which side do you cheer for?
Well, I probably shouldn't say this, but when it comes to college athletics, I root for Duke all the way. Both my kids went to Duke, as did my wife. My relationship with Duke goes back more than 40 years. As great a place as Delaware is to work, and as much as I like the environment and all the people, if Duke and Delaware play—and they have from time to time—I root for Duke.
MARGO VANOVER PORTER, Locust Grove, Virginia, covers higher education business issues for Business Officer.