When most people think of Emory's financial picture, the Coca-Cola logo almost immediately leaps to mind. Coca-Cola stock has long served as the driving force behind Emory's endowment growth, particularly since 1979, when the late Robert W. and George W. Woodruff gave an unprecedented $105 million in Coca-Cola stock to Emory.
During the past few years, however, managing Emory's financial holdings has become a much more complex endeavor than just watching the Coke income roll in, according to Wayne Coon, associate vice president for endowment investments.
Coon is not only keenly aware of the national trend toward greater diversification of endowment investments, but also led Emory's efforts several years ago to bring greater diversity to its $2.5-billion endowment ($1.5 billion of which is in Coca-Cola stock), currently the nation's sixth largest.
In addition to Coca-Cola stock, Emory's endowment investments include bonds, real estate, venture capital, non-Coke U.S. equities and foreign equities. "The two most important things about an endowment," Coon explained, "are the choice of how you do your asset allocation, which makes up at least 90 percent of your return, and who you employ to manage your money. We don't really try to do in-house management, so a large part of my time has to do with who we pick to manage our investments."
Emory has allocated almost half a billion dollars to external management firms in the past three or four years. "It's been a major reorganization of the funds," said Coon, who joined the Emory staff in 1989 after a long career in the corporate world. "If you look back to the '80s, you would see an endowment investment structure that had Coca-Cola stock, some other U.S. equities and U.S. bonds. That was about it. So what we, and everybody else, did was to transform portfolios through diversification."
While that transformation has positioned Emory well for strong growth into the 21st century, Coon still emphasizes the central role of Coca-Cola stock. "You take away that kind of engine, and you're just not going to look like we do," he said. "It's so wonderful that we have this Coca-Cola stock."
In addition to being a prudent steward of Emory's endowment investments, Coon also is a consummate (and constant) communicator of information about the endowment to the various constituencies who need to know that information. He works closely with the seven-member Investment Committee of the Board of Trustees, which makes the final decisions on how Emory's endowment funds will be invested. "These trustees are very important to the University," Coon said.
Chaired by T. Marshall Hahn, retired CEO of the Georgia-Pacific Co., the Investment Committee includes representatives from some of the most prominent and successful business in Atlanta and the Southeast. "These are some pretty sharp people," Coon said. "They are invaluable when it comes to asking the crucial questions: are we going in the right direction and are we doing the right things."
Managing what is not only the sixth largest endowment in the country, but also the two-time No. 1 endowment in terms of return on investment, would seem to be a challenging enough job for anyone. Coon, however, supplements those duties by assisting other Emory organizations and some external institutions.
Coon chairs the Emory Employee Benefits Funds Committee, which former President James T. Laney created in 1990 at Coon's suggestion. Comprised of faculty and staff from various departments, the committee oversees the retirement plan and works to ensure that the mutual funds offered through the plan are competitive. "We want to offer the right mutual funds," Coon said, "so that any employee looking at the list of funds can have confidence that it's a proper list with proper choices."
The committee played an important role in expanding the number of funds offered through the retirement plan. (Prior to 1990, TIAA and CREF were the only funds offered.)
Working closely with donors is another of Coon's responsibilities. "We work with people who have given money to Emory," said Coon, "but that money may be in a trust or a special fund, and the donor is participating in decisions on what happens to the money. It's very important to understand the donor's relationship to Emory, why they gave us the gift, what they want to get from it and how they want it managed."
Coon also offers his expertise to other schools, endowments and foundations. He is currently serving on the investment committee for the fledgling National Foundation for the U.S. Centers for Disease Control and Prevention (CDC), which is being initiated to allow the CDC to conduct projects they haven't traditionally done in the past. Coon also serves on the Metropolitan Atlanta Community Foundation's investment committee, which offers a different kind of challenge because donors to the foundation are permitted to direct where the earnings on their funds go.
As busy as he stays with these activities, though, ensuring that Emory's endowment is strong "in perpetuity" is Coon's top priority. "Our job is to be prudent and not take more risk than is appro-priate," Coon said. "At the end of the day, I want people to look back on what we did and say, `I'm glad we did that. That was a successful program.'"
--Dan Treadaway