58% of the Endowment Portfolio Would be Affected by Divestment

1. 58% of the Endowment Portfolio Would be Affected by Divestment *indicates the number of managers in this category # 6% of endowment is separately held in Wellesley’s name. We vote these proxies.

2. The Cost of Divesting Separately Held Investments • The endowment holds approximately 0.5% in the largest 200 publicly traded fossil fuel companies in three separately held accounts. These accounts represent 6% of endowment assets. • Restricting the mandates of these managers is not possible, so divestment would require the College to terminate these manager relationships. • Over the last 10 years, these managers have beat their benchmarks by 1.75% a year. Finding new managers who would perform as well and be willing to manage a restricted mandate is highly unlikely. • Assuming that replacement managers earned the benchmark return, the cost of divestment would be:

3. The Cost of Divesting Separately Held and Commingled Holdings • Investments with managers whose mandates allow ownership of public stocks and bonds represent approximately 58% of the endowment. • Restricting the mandates of these managers is not possible, so divestment would require the College to terminate these manager relationships. • We expect current managers in these asset classes to earn 1.6% more than benchmarks over the next seven years. Finding new managers who would perform as well and would be willing to manage a restricted mandate is highly unlikely. • Assuming that replacement managers earned the benchmark return, the expected return of the endowment would be reduced by 1.6% a year. The dollar cost of divestment would be: • This estimate is in line with the $200 million over 10 year cost estimated by Swarthmore, an institution with a similar investment strategy and endowment.