The University of Colorado has thrown its weight into defending an unusual lawsuit against its foundation, which alleges mismanagement of the $2.4 billion portfolio for lagging the stock market — despite outperforming peers and its own benchmark.
Rich and elderly donor Clarence Herbst sued in July after years of agitating against active management and alternative investments. “He has carried this banner for decades,” foundation president and CEO Jack Finlaw told Institutional Investor at the time.
The university has jumped into the legal fray between its foundation and Herbst to support dismissing the lawsuit. That decision could come down anytime from next week until months from now, Finlaw said Monday in a phone interview. He characterized the university’s participation as “pretty significant,” but wouldn’t predict the outcome of the dismissal request.
“While people can have various opinions on active-versus-passive investing, it really doesn’t rise to a legal issue,” Finlaw said.