UM to drop asset manager

The University of Missouri System is expected to terminate its contract with one of its investment managers Thursday at a meeting of the UM Board of Curators.

DKR Capital Inc., an asset management firm in Stamford, Conn., has managed UM money since 2002 and is one of many investment managers for the system, according to documents prepared for the curators’ meeting at MU.

To manage its approximately $3 billion, UM hires firms to specialize in different sectors of investments. These range from domestic equity to hedge funds. DKR manages $7.5 million in endowment funds and $25 million in UM’s retirement plan, the documents stated.

Nikki Krawitz, UM vice president of finance and administration, said the system splits its money among investment managers to get the highest return with an appropriate amount of risk. In this sense, DKR has not failed.

“We are not concerned about (DKR’s) investment returns,” Krawitz said. Rather, circumstances within DKR have raised questions about its future abilities.

In the past year, DKR lost two of its most successful trading teams. It dealt with this by using a number of new strategies, but documents prepared for Thursday’s meeting call these “disappointing.” The firm has also strengthened its partnership with investment firm Goldman Sachs, which Krawitz thinks could lead to a partial sale of DKR.

Krawitz said these signal an instability of the management within DKR.

“We don’t want to wait ’til something happens,” she said.

A replacement manager is yet to be found, but the board will go ahead with Thursday’s vote to follow the regulations of its contract with DKR. The firm must be notified 60 days in advance of the end of the next business quarter, which falls in September.

The board will also vote Thursday on whether to continue using a consultant firm that MU has used to develop the expansion and renovation of Brady Commons. Students voted in April to allow a fee increase of no more than $35 per semester to help pay for the project, which would nearly double the commons’ square footage.