|By Richard Lee, Staff
Writer, The Stamford Advocate - McClatchy-Tribune Regional News
November, 2011--Yale University has joined Brown University and the University of Pennsylvania in deciding not to invest in new funds created by HEI Hospitality, a Norwalk-based hotel investment firm.
Brown and Penn investment officers backed away from HEI after complaints from a hospitality workers union alleging the company condones unfair labor practices at some of its hotels.
While Yale declined to comment on the decision, HEI says their decision was not based on the allegations.
Yale's action "was done for portfolio reasons," said Nigel Hurst, HEI's senior vice president of human resources, referring to a conversation he had with a Yale official. "It's having the right balance in the investment portfolio."
Employment issues were not a part of the conversation, he said, adding that HEI has three funds, and Yale remains an investor. He has not seen other investors withdrawing from the funds or expressing doubts about investing in future HEI funds.
"It's business as usual. We care about our people," Hurst said, adding that the company has never been found to be in violation of any National Labor Relations Board laws.
HEI has 5,500 employees and owns 35 hotels and manages five others.
Calls for comment to Yale spokesman Tom Conroy were not returned, and Jonathan Macey, chairman of Yale's Advisory Committee on Investor Responsibility (ACIR), did not reply to emails. David Swensen, chief investment officer, said he had no comment in response to an email.
But an announcement posted on Yale's ACIR website advised that the university would not give new business to HEI after its current investments end.
"Based on the fact, recently communicated to the chair of the ACIR (Macey), that Yale will not continue to invest in funds sponsored by HEI, the ACIR will cease to consider issues regarding the employment practices at hotels controlled by HEI," read the statement.
The university, located in New Haven, has a history of promoting social responsibility in its investing.
Yale established the Advisory Committee on Investor Responsibility in the 1972-73 academic year, focusing on social responsibility issues, including corporate investing in South Africa, defense contracting, political lobbying and environmental safety.
It was followed by the Yale Corp.'s formation of the Corporation Committee on Investor Responsibility.
According to the ACIR website, the CCIR recommends policy to the full Yale Corp., and is charged with implementing approved policy. The ACIR, composed of two students, two alumni, two faculty and two staff members, assists the CCIR in implementing policy.
Based on Yale's success in its investments for the fiscal year ended June 30, the university will be able to find attractive alternatives to future HEI funds.
Yale's endowment earned a 22 percent return in the most recent fiscal year, with the endowment's value rising to $19.4 billion, based on investment gains of $3.6 billion.
Employees at HEI's Embassy Suites Hotel in Irvine, Calif., lauded Yale for its decision.
"Many thanks to Yale University for its decision not to invest more in HEI," said Ana Maria Trevino, a housekeeper at the hotel, in prepared comments.
Universities should focus on improving people's lives and not investing in exploitative corporations, she said.
Social responsibility may not be as high on the agendas of other universities and foundations because they are trying to recoup losses incurred in the economic crash of 2008, said Russ Mason, president of the Investment Management Institute in Greenwich.
"Schools like Harvard and Yale did very well in 2009 and 2010," he said. "Social responsibility is a peak and valley topic. It's been that way for 40 years. It's hot and cold."
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