Africa makes the grade for richest US university investors

Americas wealthiest universities are venturing into Africas fast- growing frontier markets in search of outsized investment returns that will allow them to offer scholarships, lure star professors and fund research. For Sub- Saharan Africa, recognition from these deep-pocketed US institutions, who have often earned envy among fellow global investors for their strong returns, marks asignificant shift.

American university endowments — permanent funds of educational institutions — pride themselves on spotting new investment opportunities early, such as venture capital, private equity and natural resources such as timber. Combined, they manage assets of over $ 400 billion. A study of 831 endowments by the Commonfund Institute and the National Association of College and University Business Officers published this year showed their annual net returns in the 10 years to June 30, 2012, averaged 6.2 per cent. In the same 10- year period, returns for the US S&P 500 stock index were 5.3 per cent.

In Africa, they are seeing many of the trends that played out in emerging markets like China, India or Brazil – strong economic growth, an emerging middle class, greater political stability and improved government balance sheets.

These are just the attractions that US President Barack Obama highlighted on his recent trip to the continent when he urged American and other investors to “come down” to Africa. “The growth, consumer spending, improved governance and disposable wealth, theyre all positive stories,” said William McLean, who manages Northwestern University’s $ 7- billion endowment.

His team is investing in Nigeria and Kenya among other countries and recently doubled its exposure to Africa. “Our motivations are making some money,” he told Reuters in a telephone interview. “You have to look everywhere for growth.” It is difficult to know exactly how many US university endowments have put money in Africa because most prefer not to discuss their investment strategy.

Wale Adeosun, founding partner at New York- based investment firm Kuramo Capital Management, said endowments interest in Africa began after the 2008- 2009 financial crisis. He estimates that 10 to 15 per cent of these institutions are already investing in Africa. Up to 30 per cent may be seriously looking for deals there, he says.

“The larger pools of capital are here in the US and youre seeing the interest picking up about exploring opportunities in Africa,” Adeosun added. Many endowments are required or aim to channel about five per cent of their market value to their schools budget each year, to fund scholarships, research and new campus facilities.

The interest means that Africa is attracting a new class of investor – those with unlimited time horizons, in contrast to the speculative hot money that poured into the region before 2008 only to vanish when the global financial crisis hit.

“Its a lot more patient capital and … the healthy thing about that interest is that its likely to withstand the short term noise around the tapering of QE (US quantitative easing),” said Razia Khan, head of Africa research at Standard Chartered.

Besides offering the possibility of cheaper assets and higher returns that have been hard to come by since the global financial crisis, Africa along with other frontier markets also provides more diversification for the investors.

US endowments awakening appetite for Africa is another sign that the continent is shedding its past reputation for conflict, poverty and aiddependency in favour of a more positive image of progress. Lindel Eakman, Managing Director of private markets at the University of Texas Management Company, told aprivate equity conference in Cape Town earlier this year that Africas reality is different to what is often reflected by media coverage.

Source: Business Standard, July 9, 2013 

IIT-Madras talks joint PhDs with US universities; move to improve profile of students

Last July, Indian Institute of Technology Madras (IITM) director Bhaskar Ramamurthy and external relations dean R Nagarajan set off on a rather unusual mission: to ask American universities whether they were interested in offering joint PhD programmes with IIT Madras. The IITs have got the best undergraduate students in India – probably in the world – but their PhD programmes were not going too well. Most IIT undergraduates left for high-paying jobs or management education after their degree and the remaining went for PhD in overseas universities.

All the IITs were working to change this, and IIT Madras had found its own unique method. Ramamurthy and Nagarajan went to 20 American universities. These universities were not picked at random. They had IIT Madras alumni as senior faculty who could be used to broker relationships. IIT Madras, like many top institutions, had a number of collaborations between the faculty in many universities. But Ramamurthy wanted to take the collaboration to a deeper level culminating in a joint PhD programme in the near future.

IIT Madras had one such programme with National University of Singapore, but it had not gone too well — only one student had used it in six years. Ramamurthy wanted to sow the ground first with US universities before offering joint PhD programmes. Their tour went exceptionally well. US universities were too keen to collaborate with IIT Madras.

Michigan State University was eager to get to a joint PhD programme quickly, as soon as later this year. Two others, Purdue University and the University of Maryland, also wanted to move on to deeper relationships culminating in a joint PhD programme. IIT Madras expects more US universities to join this list soon which should expand to include universities from other countries. Taiwanese universities are at the top of the list outside the US since they found many IIT PhDs end up in the Taiwanese semiconductor firms.

The Shift
The IITs are now in the middle of a paradigm shift as they try to morph from world-class teaching institutions to world-class research centres. Their PhD students are an important part of this shift. But they have not been able to persuade their undergraduate students to do PhDs in their own institutions. Integrated programmes for undergrads have had very few takers while their masters and PhD students come from other engineering colleges, and often with inadequate preparation for the rigour of a PhD programme.

Most of them do not get exposed to global trends during their PhDs and the IITs do not get foreign students to any significant degree. Meanwhile, IIT faculty has got strong hints about the possibilities of sending students abroad. “We’ve seen students who go abroad come back transformed,” says Ramamurthy. IIT faculty has found that students who spend some time abroad on collaborative projects are better prepared for continuing their research work here. They also meet students from many countries and get a better sense of their own place in the global education ecosystem.

Unlike the great universities, IITs are not ethnically-diverse campuses. Foreign research students come to India in small numbers but IITs and other institutions are keen to increase their presence. “A joint PhD is a good way to bring visitors to our own campuses,” says Ramamurthy.

Source: The Economic Times (Online Edition), January 28, 2013

Indians again enmeshed in U.S. university visa scam

For the families of possibly more than 400 Indian students in the U.S. it must have seemed like an encore to a nightmare, as they found themselves trapped in yet another university visa scam, even as the echoes of the 2010 Tri-Valley University (TVU) fiasco continue to reverberate through the U.S. higher education system.

This time 450 students in Herguan University of Sunnyvale, California, 94 per cent of them Indian according to some estimates, faced an uncertain future after the U.S. Immigration and Customs Enforcement (ICE) issued a “notice of intent to withdraw” accreditation.

On Thursday, federal agents were said to have raided Herguan and charged its CEO, Jerry Wang, with visa fraud “in a 15-count indictment that could send him to prison for up to 23 years and amount to more than $1 million in fines.” He faces specific charges of submitting false documents, false transfer letters and making false statements to federal regulators.

The San Jose Mercury News quoted a graduate still connected to Herguan, as saying that “the news of the raid came as a shock,” adding that foreign students were told “that in the next 15 days, if something doesn’t change, you either have to find a different school or leave the country.”

According to a statement by the ICE, students currently enrolled at Herguan have two choices — either to “continue to attend classes, or continue to work at the job for which they were authorised Optional Practical Training (OPT), and maintain their active status in a manner required by regulations, or transfer to another Student and Exchange Visitor Programme-certified institution.”

The option to maintain status under the current regulations would presumably include transfer to another university. However, the ICE guidance to the students took an ominous tone on the time frame for such transfers as it warned that they could not maintain their active status, “they must depart the country without prejudice within seven calendar days.”

The “without prejudice” clause suggests that re-application for a university position after returning to India would be an option too, and their prior enrolment at Herguan would not be a negative factor in the consideration of a second application.

Source: The Hindu, August 5, 2012

>University of Texas endowment takes $1 billion in bullion

>The University of Texas Investment Management, the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion as the metal reaches a record, according to the fund’s board.

The fund, whose $19.9 billion in assets ranked it behind Harvard University’s endowment as of August, according to the National Association of College and University Business Officers, last year added about $500 million in gold investments to an existing stake, said Bruce Zimmerman, the endowment’s chief executive officer. The holdings reached about $987 million on Saturday, as Comex futures closed at $1,486 an ounce.

The decision to turn the fund’s investment into gold bars was influenced by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said on Saturday at its annual meeting. Bass made $500 million on the US subprime-mortgage collapse.

“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said on Sunday in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”

Gold reached an all-time high of $1,489.10 an ounce today in New York as sovereign debt concerns boosted demand for the metal as a store of value. Gold has climbed 28% in the past year on Comex.

The endowment, which oversees funds held by the University of Texas System and Texas A&M University, has 6,643 bars of bullion, or 664,300 ounces, in a Comex-registered vault in New York owned by HSBC Holdings, the London-based bank, according to a report distributed at Saturday’s meeting in Austin.

Source: The Financial Express, April 18, 2011

>More Indians apply for courses in U.S.

> The number of Indian applicants to graduate programmes in the U.S. universities has increased by 7 per cent this year. This follows a 1 per cent increase against the previous year. According to the Council of Graduate Schools (CGS), the overall graduate applications to the U.S. universities from overseas students had risen by 9 per cent over the previous year, the sixth year running of continuous increases.

International students form an integral core of the graduate student population in the U.S., accounting for 15.5 per cent of the total. The most popular fields among international students for studies at the Master’s and Ph.D. levels in the U.S. are engineering, physical and earth sciences (including computer science and mathematics), and business studies. These fields account for 62 per cent of the total graduate-level applications.

Applications from prospective graduate students from China and the Middle East & Turkey rose by double-digit percentages in 2011 for the sixth consecutive year in a row, increasing by 18 and 12 per cent respectively. Applications from prospective graduate students from India rose 7 per cent in 2011 following a 1 per cent gain in 2010 and a 12 decline in 2009.

The CGS International Graduate Admissions Survey collects data on four key sending countries or regions: China, India, South Korea, and the Middle East and Turkey. China, India, and South Korea are the top three countries of origin for international graduate students in the United States. Collectively, students from these three countries account for about one-half of all non-U.S. citizens on temporary visas attending U.S. graduate schools, according to research from both the CGS and the Institute of International Education.

A copy of the CGS report is available at: http://www.cgsnet.org/portals/0/pdf/R_IntlApps11_I.pdf

Sources: U.S. Embassy, New Delhi & The Hindu, April 16, 2011

>US varsities taking holistic view of Asian students’ applications

>The focus is shifting from the entrance test scores to a holistic assessment of the profiles of Indian and Asian students aspiring to pursue higher education in the US and Canada, officials said Saturday. IDP Education India, one of the largest education placement companies in the world, is currently hosting global education fairs showcasing US and Canadian universities across the country for aspiring students.

“The universities are paying attention to other things than just test scores lately to judge aspiring Asian students seeking admission to American universities. They are trying not to penalise the profiles of students if they fail to log high scores in SAT, GMAT and GRE entrance tests,” Luna Das, IDP Education’s national manager for training and client relationship (North America), said at a press briefing here Saturday. Citing a recent instance, she said: “An Indian student who scored 580 in GMAT (Graduate Management Test Examination) applied to study master of business administration at the Stanford University.

“Usually, one cannot expect a student with a GMAT score of 580 to make it to Stanford University. But the university took into account the student’s exceptional credentials, professional experience, insightful essays, social work and contacts in the industry to decide that his presence would add value to the classroom.” She said the IDP expected to send nearly 250 Indian students to the US in 2011 fall term. The firm partners with 80 US universities and counsels students applying to 200 universities in America.

According to Mirjana Radulovic, international marketing and recruitment specialist at the University of Waterloo in Canada, “more and more universities in North America were adopting a holistic approach to admission than just relying on the entrance test scores”. Her university, which works with the IDP Education, was no exception. “Many universities in Canada do not require entrance test scores. We assess students on their bachelors programme and high school scores,” Radulovic said.

A tentative break-up of GMAT scores for outstation students for the year 2011 and the corresponding ranking of universities shows that non-American aspirants with an average score of 700 and above are eligible for US universities like Harvard University, Stanford University, U-Penn (Wharton), Massachusetts Institute of Technology (MIT-Sloan), Northwestern (Kellogg), Columbia University, Berkeley, University of California, Yale and New York, says Learn Hub, a campus listing group. A tentative trend of the average Graduate Record Examination (GRE) scores for 2010-2011 shows that top US universities like the MIT, Stanford, Berkeley, Georgia Tech, Cal Tech, Harvard and Cornell require a aggregate of 1,200 and above.

Pointing out changing trends in technical education, Jeffery W. Grundy, director, office of international students and faculty of the New Jersey Institute of Technology, said: “Students from India were more inclined to newer streams of technology like bio-informatics, bio-medical technology, electrical technology, pharma-tech and communication technology. “Nearly 99 per cent of Indian students wanted to have work experience in the US,” he said. The New Jersey Institute of Technology has 670 Indian students in its fraternity of 1,250 students.

IDP has a network of 17 offices in 16 cities of India. “We are planning to set more centres in northeastern India and in Ranchi and Patna,” a spokesperson said, adding that the “next two years would see at least 30,000 to 32,000 Indian students applying to foreign universities after a period of low following incidents of racial violence”.

Source: The Economic Times (Online Edition), February 5, 2011

U.S. varsities looking for India tie-ups

Partnerships between Indian colleges and American universities are likely to grow as 10 U.S. institutes are travelling across India to expand academic partnerships. The delegation, which was in Mumbai on Tuesday (November 9), visited three universities — Narsee Monjee (a deemed university), Tata Institute of Social Sciences and ICFAI University.

The delegation’s visit, funded by the U.S. Department for Education, seeks to support institutes wanting to enter into partnerships, forge academic collaboration, expand curricular offerings, advance joint research, and prepare students with the international experiences and cross-cultural tools needed in their careers. “However, many institutions face significant challenges in navigating education systems in other countries, identifying appropriate partners and developing effective institutional partnership strategies,” stated a press note from the International Institute of Education (IIE).

“The delegation’s aim is to visit higher education institutions and international organizations in select cities to observe higher education in India and learn about international partnership priorities from the Indian perspective,” the press note stated.

Rajan Saxena, Vice-Chancellor of N.M. University, who interacted with the delegation, said that his institute would be keen on joining hands with American universities interested in partnering in programmes in emerging disciplines. “There were a range of universities that visited us – from public institutions to research universities to community colleges to institutes that promote continuing education,” Saxena said. N.M. University, which already has a tie-up with Harvard University for faculty development, is interested in attracting international students and ‘bringing an international experience to its classrooms right here,’ he said.

American universities have seen a serious beating in their endowments during the financial crisis. Also, American institutes have taking serious cognizance of the fact that America slipped to the second place when fresh enrollment numbers were compiled last year. This trip could probably broaden ties with universities of a country that is projected to have the largest young population for at least another decade.

Source: The Times of India, November 9, 2010

Obama leads U.S. universities to India

Yale University and Duke University are among dozens of U.S. colleges that India is recruiting to help educate its population with more than 550 million people under age 25. Duke, Brown University and the University of Chicago are planning offices, research centers and campuses in India. The presidents of the University of Pennsylvania, Stanford University and Cornell University have traveled to India to raise money and establish collaborations. Yale President Richard Levin visited India last week to set up a joint program that will educate Indian college leaders.

President Barack Obama will make a three-day state visit to India, starting tomorrow (November 6), accompanied by U.S. university officials eager to strengthen their ties to the country. Institutions want to “get in on the ground floor” as India’s economy and education system mature and the nation becomes a global power, said Dipesh Chakrabarty, a University of Chicago history professor who is leading the university’s efforts to plan a research center in New Delhi, India’s capital.

“We see India as a tremendous opportunity for higher education,” said Robert Brown, President of Boston University and a member of the delegation traveling to India, where he aims to open a campus, in a telephone interview. “There’s tremendous demand, a growing population in the middle class, an English-speaking, well-organized educational system — all the things that you need to interface with a private American university.”

Read the full report on Bloomberg site – http://www.bloomberg.com/news/2010-11-05/universities-tag-along-with-obama-to-india-to-set-up-ties-like-yale-duke.html

Source: http://www.bloomberg.com/