Jane Dietze has run Brown University’s more than $6 billion endowment since mid-2018, beating all her Ivy League peers in performance.
She has done it by selecting money managers to invest in hedge funds, private equity and across asset classes. The fund’s value has increased more than 70% since she took the reins as chief investment officer.
Over that time and for years before, assorted groups of students have demanded a say in how the fund is run — claims that have been largely ignored. But now, after an unprecedented campaign on campus by students protesting against Israel, the university has agreed to listen.
The Brown Divest Coalition is pushing the Providence, Rhode Island, school to screen its holdings for “companies complicit in human rights abuses in Palestine,” including in Israel’s war effort, and then exit any such investments.
Based on an April deal with demonstrators to clear an encampment, a committee of students, faculty and alumni will make recommendations about divestment that will be voted on in October by Brown’s board of trustees, led by Bank of America Corp. CEO Brian Moynihan.
The coming debate at Brown will reverberate nationally as students return for fall classes and colleges brace for a potential repeat of the spring protests that roiled campuses from New York to California. Divestment ranked among the demonstrators’ top demands at universities such as Harvard, Columbia and Northwestern, as students sought to leverage their schools’ riches to pile pressure on Israel and weapons makers.
“It’s to set a chain reaction,” said Arman Deendar, a spokesperson for the Brown divestment coalition, who’s entering the senior year studying computer science and history and uses the pronoun "they." “Brown divesting, as a highly influential Ivy League private institution, would set a social precedent.”
From a practical standpoint, there’s little chance the demands will make much headway at university endowments, which in the eight-school Ivy League alone control about $185 billion in assets. While Brown’s fund is the smallest in the Ivies, it has posted the best returns over three, five and 10 years — enabling the school to expand its budget for financial aid and salary increases.
Few other schools have made agreements like Brown’s. And there are legal restrictions: Many states have laws banning discrimination against Israel, although Rhode Island’s measure doesn’t apply to private institutions such as Brown, according to the state’s Department of Administration.
But the Brown deal guarantees that divestment will be on the agenda as the school year begins. That has infuriated lawmakers and some alumni, including prominent donors, and put the school in a bind in which it faces a precedent-setting decision or a potential rallying cry for the campus protest movement.
Barry Sternlicht, a billionaire real estate investor and former Brown trustee, slammed the vote for legitimizing a debate on divestment that he views as out of bounds.
“If the vote fails, the students will blame the alumni and other pressure on the board,” said Sternlicht, who paused gifts this year after the deal with protesters was announced. “And if it succeeds, a great injustice will have been made.”
College students are returning after a tumultuous year in which the Israel-Hamas war spurred campus demonstrations and protest encampments around the country that in some cases were met with police crackdowns.
University leaders across the country struggled to balance free-speech concerns alongside criticism that antisemitism was being tolerated on campus. The presidents of Harvard and the University of Pennsylvania resigned after giving widely criticized testimony in December over the question of whether calling for the genocide of Jews would breach school regulations. Their counterpart at Columbia abruptly stepped down this month, just weeks before the start of classes.
Tougher approach
Following their difficulty in removing encampments in the spring, many schools are adopting tougher rules on protests ahead of the fall semester. They’ve also been under pressure from lawsuits by students accusing them of providing an unsafe environment and congressional investigations into antisemitism on campus.
The University of California system recently announced a ban on encampments and masks used to conceal identities. Penn adopted a similar protocol on encampments at the end of last semester and said reservations for events in most spaces would have to be made 48 hours in advance. At Harvard, students need to get permission before setting up tents, art exhibits or chalking on the sidewalk in public spaces.
It’s unclear how intense pro-Palestinian protests will be after a summer lull. But many student activists are gearing up as Israel’s war against Hamas grinds on in Gaza. The conflict erupted after Hamas fighters attacked Israel on Oct. 7, killing about 1,200 people. Israel’s retaliatory response has killed about 40,000 people, according to the Hamas-run health ministry in Gaza, which doesn’t distinguish between combatants and civilians. Israel is also confronting Iran-backed Hezbollah militia in southern Lebanon, which threatens to escalate into a broader regional war.
At Harvard, one group said it would hold “Liberation Orientation” the week before classes start for “all new and returning students and workers organizing for Palestinian liberation,” according to an Instagram post.
A negotiator for Columbia’s pro-Palestinian protest group told The Hill that activism would continue in the fall through demonstrations, encampments and “any available means necessary to push Columbia to divest from Israel.”
Students at Brown, meanwhile, spent time over the summer “power mapping” the board of trustees by learning about its members and engaging in political education.
Through a Brown fellowship, Deendar, the student from the divestment coalition, spent time meeting with community activists in New York, where they said they took part in protests at the Barclays Center and Brooklyn Museum.
The student proposal submitted in July outlines divestment criteria and calls on the school to identify any holdings tied to 10 companies. The roster includes manufacturers with large defense businesses such as Boeing Co., Northrop Grumman Corp., RTX Corp. and Providence-based Textron Inc. Also on the list are Volvo AB and Motorola Solutions Inc.
Brown’s public filings show no direct holdings in the companies or ownership through exchange-traded funds. Dietze, the chief investment officer, said this year that the “average personal investor in the broad market likely has substantially more exposure” to them.
About 96% of Brown’s endowment is invested with third-party managers such as hedge funds and private equity firms, In a university Q&A this year, Dietze said their holdings aren’t publicly available. Brown and Dietze, who worked previous stints at Bowdoin College and Fortress Investment Group, declined to comment for this article.
‘Naming and shaming’
The students’ proposal also advocates for a comprehensive screening procedure for any future investments, said Eli Grossman, one of four seniors who signed the April agreement with the university setting up the board vote.
“Often divestment campaigns start by publicly naming and shaming a few of the worst offenders as important examples to justify the need for such an investment screen,” said Grossman, who graduated in May and works as a wildland firefighter for the National Park Service.
College endowments have come under pressure in recent years to sell off other kinds of holdings. Climate activists, for example, have urged funds to exit holdings in oil and gas.
Brown exited effectively all its interests in fossil-fuel energy strategies by 2019, a move that Dietze described as “an investment decision, not an ethically minded divestment decision.”
The protesters are looking forward to arguing why this time should be different.
“The university has different avenues to get money,” Deendar said. “As someone who cares about children not getting bombed, I’m not really worried about the university covering their losses.”
Dietze, Brown’s chief investment officer, believes the endowment is little understood, including its investments, according to the Q&A she conducted this year. While the fund once had oil and gas strategies, it doesn’t have anything similar for defense or weapons manufacturers.
“The endowment has nothing in our portfolio that looks like this," she said. "It’s simply not a strategy we have ever seen fit to pursue.”