Ada Fisher: Hedge fund investments help NC’s colleges

Published 12:00 am Sunday, January 16, 2022

By Ada Fisher

North Carolina has made many strides in improving access to higher education, but more can still be done.

Students from Black and brown communities still too often face challenges on the path towards obtaining an advanced degree. Our nation’s policymakers must do everything in their power to equip students of color with the resources necessary to navigate these challenges, giving them a fair, direct path towards a university degree, other advancement opportunities and knowledge for themselves and their families. One way to do so is to improve access to scholarships, which are often supported by investments in hedge funds.

Throughout the United States, including North Carolina, college and university endowments invest in hedge funds as part of their mission to grant aspiring college students scholarships and keep tuition costs affordable. These endowments invest directly in hedge funds because they offer a long-term return on investments and protections against volatility and risk. The returns generated by hedge funds can result in more scholarship money for students, including those from disadvantaged backgrounds who may not otherwise be able to afford college.

The connection between hedge funds and college scholarships may not be well known, but it is vital for many North Carolina students. Any misguided regulatory proposals aimed at hedge funds will ultimately hurt these students, potentially thwarting their college aspirations before they begin.

Every year, thousands of students of color attend the University of North Carolina, Wake Forest University, Duke University as well as North Carolina’s historically Black colleges and universities (HBCUs), which comprise of 10% of the nation’s HBCUs. North Carolina’s flagship schools are educational leaders with extremely diverse student bases. For example, 30% of my alma mater UNC Greensboro’s student body is comprised of people of color. The endowments of UNC, Wake Forest and Duke invest nearly $4 billion in hedge funds on behalf of hundreds of thousands of students, many of whom come from diverse backgrounds.

As this number increases, so does the amount of scholarship money available for Black students that attend HBCUs. North Carolina A&T State University, a nationally recognized HBCU, is a member of the University of North Carolina’s Investment Fund (UNCIF), which invests in hedge funds. The return on UNCIF’s hedge fund investments helps support students that attend North Carolina A&T, which not only is the largest HBCU but it has one of the largest endowments of any HBCU in the country.

In addition to North Carolina A&T State, Livingstone College is also an HBCU benefiting from of hedge fund investments, through the United Negro College Fund (UNCF). UNCF invests millions of dollars in hedge funds to help colleges like Livingstone grant scholarship money to much-deserving students.

Hedge funds have often been unfairly maligned as faceless Wall Street suits. Don’t listen to the internet message boards and misguided politicians; this portrayal couldn’t be further from the truth. Hedge funds are Wall Street institutions whose work has direct, tangible benefits for North Carolinians, including first-generation college students and aid to the debt burden of many seeking education.

When D.C. policymakers and regulators meet to discuss new proposals that govern our financial system, they must see through the false narratives surrounding hedge funds and avoid policies designed to hamper their ability to perform in the markets. Failing to do so will cost North Carolina our next generation of leaders.

Ada Fisher is a former RNC National Committeewoman from North Carolina and an advocate for historically Black colleges and universities.