A new state law currently being considered would allow the University of Michigan to keep its investment information private:

“In response to a threat by a major venture capital fund to exclude investment by the University of Michigan, legislation is making its way through the state Legislature to exempt universities from disclosing sensitive information about their investments.

The Michigan Senate on March 24 voted 33-4, with one abstention, in favor of a bill to amend the Confidential Research Information Act, initially passed in 1994 to protect intellectual property and other sensitive information generated by research at public universities and colleges. …

Garcia’s legislation essentially would allow universities, colleges and community colleges to avoid disclosing details of their investments as long as they report aggregated information annually.

According to Cynthia Wilbanks, U-M’s vice president for governmental relations, the legislation is modeled after rules already in place for the state’s pension funds.

Institutions would have to report the name of each company in which the university invests, the total amount of money invested in portfolio companies, the total rate of return and the source of any public funds invested.

… The issue came to a head in July 2004 when Menlo Park, Calif.-based Sequoia Capital asked U-M to sell its investments in Sequoia funds, which has funded the likes of Internet portal Yahoo. (See Business Direct Weekly, Sept. 4-10.)

Sequoia said it was concerned that U-M would be forced to release damaging information about the companies it invests in through Sequoia because of freedom of information laws.

A freedom of information request filed in February 2004 by the San Jose Mercury News forced U-M to reveal the funds performance figures.

U-M invests a small portion of its $3.5 billion endowment in venture funds for diversification purposes. Overall, it had 4.3 percent invested in venture funds in 2003; in 2002, it had $54 million invested in Sequoia funds. …”

> Business Direct Weekly: “U-M investments spur new info rules”

It turns out the fund in question, in which the University has invested $54 million, has been a national leader in funding call center companies located in India.

Curious about what companies the University has invested in? Three snapshots of the University’s “directly held equities” are avaliable on this website – from 2000, 2001, and 2002. How many corporate criminals can you find?

Author: Rob