Rallo Replacement Committee Driven by Carr Trustee

The committee to replace Angelo State University President Dr. Joe Rallo has been named. 

“Angelo State is an evolving university, and we are determined to find the best leader who will continue the institution’s tradition of excellence and vision for the future.” 

It essentially exists of two Carr Foundation Trustees (one of which is chairing the Search Committee), two area executives (one of which doubles as San Angelo's Mayor) and two ASU faculty leaders (one formal, the other informal). 

Dr. Rallo and new Carr Trustees changed nearly everything about Carr, despite assertions to the contrary in 2007.  An evolving foundation needs a new ASU President to drive policy.

The final selection will be made by the chancellor, who will seek confirmation of his choice by the Board of Regents. 

Early reports had Rallo working to find his replacement.  That fact didn't make this press release.  Also, there was no mention of the consulting firm assisting with the search.    

Dr. Rallo will concentrate on veterans’ issues, distance learning and international programs at TTU, as well as provide the face for academic affairs system-wide.

MedHab's Newsworthy 2012 Yields No News

One might expect a fledgling medical device company to link to the series of stories run in West Texas newspapers in 2012, but MedHab stoically refuses to update their news/press releases page.:

San Angelo Standard Times - 2 stories
Abilene Reporter News - 2 stories
Lubbock Avalanche Journal - 4 stories - referenced here and here

Also, MedHab could have linked to  the economic development package offered by San Angelo Development Corporation.  One might expect a $3.6 million package to be newsworthy   Lastly, ASU magazine did a story on MedHab founder Johnny Ross, which was picked up by several web news aggregators.

Yet, MedHab's website shows its latest news as of June 2011.  For a year with such news, it's odd there's no news.

TTU & ASU's Carr Dischord

One might expect Angelo State and Texas Tech Annual Financial Reports to be in harmony on The Carr Foundation after the two universities merged in 2007.  They start out aligned. Both show Vaughan Nelson and Fountain Capital as investment managers.  

That picture diverges in 2008 and beyond:  The timing of ASU's shift from Vaughan Nelson & Fountain Capital as investment managers to Texas Tech's Long Term Investment Fund (LTIF) is noteworthy.

Texas Tech documents show the shift nearly complete in early 2009, while Angelo State reports don't mention the move until 2011.  Note who ASU wants to take the blame for two years of investment losses.  It's not Texas Tech.

An apparent insider (critical of my series of posts) offered

The transition of the funds (to TTU's LTIF) began in 2007 and was finalized some 15 months later.

A  university audit from February 2008 indicated changes were in store:

Who was ASU's Manager of Scholarship Programs?  Were they eliminated per the audit suggestion?

For those who like to check for themselves:

ASU FY07
ASU FY08
ASU FY 09
ASU FY10
ASU FY11

TTU Managed Investments 11-07

TTU Managed Investments  2-08

 
TTU Managed Investments  5-08

TTU Managed Investments  2-09

TTU Managed Investments 2-10 & 2-11

Also, why did TTU report Carr as miniscule in early 2011?  ASU's website states the Trust has over $96 million. That's a big typo...

TTU Regents' Agenda: ASU Program Deletions

On the consent agenda last Friday:

Dr. Rallo's achievements during his tenure as ASU President need amendment.

Angelo State now offers about 50 degrees, 10 more than before the realignment, Rallo said.

If the TTU Board of Regents approved the consent agenda, ASU's medical technologist program will be gone, as will its Masters in Nursing - Clinical Specialist. and the Masters of Public Administration.  I thought ASU's Health Programs were "of distinction" and the Graduate School a huge factor in ASU's growth.

The following information exaggerated ASU's success by roughly 1,000 students.  

Since the merger became official Sept. 1, 2007, student enrollment has grown from 7,083 to about 8,000, a 13-percent increase.

Why the proposed moves?  What did the Board of Regents decide and when will ASU faculty find out?  Will it be in the newspaper like Dr. Rallo's promotion?

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Did Carr Save Tech's LTIF Pool?

After researching the movement of Angelo State University Carr Trust funds into Texas Tech's Long Term Investment Fund (LTIF), a thought struck me.  Was Carr cash a timely capital injection for Tech's LTIF during the Fall 2008 Financial Crisis?

The Texas Tech Foundation offered in its 2009 Annual Financial Report:

The majority of Texas Tech University System assets are invested in two investment pools; the Long Term Investment Fund (LTIF) and the Short/Intermediate Term Investment Fund (STIF).  Endowment funds and certain eligible long-term institutional funds are invested in the LTIF, which invests in equity and fixed income securities and is operated using total return philosophy.

The LTIF has experienced varying performance since its inception.

The Robert G. and Nona K. Carr Foundation was established for the benefit of Angelo State University. The Foundation is included in the Texas Tech University System financial statements as a blended component unit.

As there are no public documents showing the LTIF's performance during the meltdown, hints must be found elsewhere, i.e. in the foundations the LTIF serves..

The Texas Tech Foundation experienced a $42.9 million loss in 2008.  Angelo State's Carr Foundation lost a mere $2.9 million when it sold securities with a cost basis of $34 million for $31 million. 

Carr invested $39 million in Tech's LTIF in 2007.  That grew to $71 million in 2008.  The question is when Carr's additional $32 million hit Tech's LTIF?  If it came in the midst of the financial meltdown, Carr's cash could've been a stabilizer for an investment pool holding derivatives and mortgage backed security obligations. 

Depending on the directional bets, such a portfolio could've faced a deluge of capital calls.  Below is the foundation's international currency exposure. 

Did Carr money help Tech's risky investment pool during the financial crisis?  That'd make a good business school case. 

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Texas Tech's HemoBioTech

Searching for Texas Tech on Edgar, the SEC's online databese, I came across HemoBioTech.  Filings indicated Texas Tech owned over 800,000 shares, amounting to 5.8% of the company.  HemoBioTech was in the business of providing human blood substitutes.

Once the cash was drained from HemoBioTech, it ceased filing SEC reports.  None were filed in 2011 and 2012. 

One investor bet big on the firm in 2010.  He was:

The author of a new soon to be released investment book, "Finding Midas" "The Way to Mega Stock Gains."

I hope the book came out before HemoBioTechs' breakdown.I'm sure this is the exception to Texas Tech's investing prowess.  It was the only story available through the SEC.  Count it as a one off.

Carr Trust Invests Almost Exclusively with TTU

Carr Foundation IRS filings showed a growing relationship between the Carr Trust and Texas Tech's Long Term Investment Fund after Dr. Joe Rallo arrived as President and Angelo State University joined the Texas Tech System.  By 2011 the Carr Trust invested 98.9% of its corpus with Tech's Long Term Investment Fund (LTIF).

A May 2011 report on Texas Tech's managed investments had a footnote for Carr:

Any non-LTIF balance for Carr is just cash that is either moved to the LTIF or remitted to ASU after this report date.

That means Texas Tech's LTIF is the sole investor for ASU's Carr Foundation.

Oddly, Texas Tech's Long Term Investment Fund is not listed as a nonprofit under Guidestar, nor does it file with the Securities and Exchange Commission (SEC) as an investment manager.  It appears to be a private investment fund.

In late 2011 Tech's Long Term Investment Fund changed its asset allocation, shifting more resources to Private Real Assets.  That the subject for another post