Charlie Eaton: How College Endowments Became Hedge Funds

Seminar | March 27 | 12-1:30 p.m. | Dwinelle Hall, Academic Innovation Studio, 117 Dwinelle Hall (Level D)

 Charlie Eaton, Assistant Professor of Sociology, UC Merced

 Center for Studies in Higher Education

How College Endowments Became Hedge Funds
Rising wealth inequality in America has been paralleled by growing resource inequalities in higher education. This inequality in higher education has been fueled by a spectacular rise in endowment wealth at elite private schools since the 1980s. At the 5 wealthiest institutions, annual spending per student from the endowment increased by 751% from $9,724 in 1977 to $92,736 in 2012 in 2012 constant dollars. What caused this resource boom? Using unique data from 1960 to present, I explore four possible factors and their interrelationship: 1) higher growth rates in equity asset values caused commensurate growth in endowment investments in equities, 2) endowment managers invested in hedge funds and in-house hedge fund strategies, 3) increased donations from wealthy donors capitalized expanded hedge fund investing, 4) schools directed increasing shares of donations and other available capital to their endowments. These potential factors trace possible mechanisms by which wealth inequality accumulates in capitalist societies and by which wealth inequality can shape the civic sphere and educational stratification.

About the speaker: Charlie Eaton
Charlie Eaton is an Assistant Professor of Sociology at UC Merced. His research investigates the role of organizations in the interplay between economic elites and disadvantaged social groups. What forms of organization strengthen elite efforts to consolidate power in politics and the economy? What are effective organizational strategies by which non-elites can achieve more equitable distributions of power, wealth, and status? His primary current research project investigates relationships between financialization and growing inequalities in U.S. higher education.

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 Brown bag lunch

 loren.delacruz@berkeley.edu

 The Academic Innovation Studio is located in Dwinelle Hall on Level D. Turn left as you enter the building from the main (Dwinelle Plaza) entrance.