The University of Toronto was forced to curb its investment strategy after losing 30 per cent of the school’s pension and endowment funds in a single year.

According to the Globe and Mail, the changes come from a report by a blue-ribbon panel led by a former chancellor and major donor to the school.

The panel recommended the University move the independently operated University of Toronto Asset Management in-house. Other recommendations included changing the governance structure of UTAM, recessing the return targets on investment and appointing a chief investment officer for the University.

“I don’t think they really knew what they were doing.” said George Luste, president of the University of Toronto Faculty Association.

UTAM was brought in so U of T could follow in the footsteps of universities such as Harvard, which have more aggressive investing practices.

“They thought they could just emulate someone and hire people to carry it out, but it’s not that simple,” Luste added.

David Naylor, president of U of T, confirmed administration will be following the report’s recommendations, in general. He said they will take other inputs into consideration such as “legal advice and discussions with affected stakeholders.”

Luste was more skeptical.

“My view is it’s just going to bring the problem in-house. What they don’t discuss in the report is whether or not we should be trying to outguess the stock market,” Luste said, adding UTAM used aggressive investment tactics, which were not looked at in the report.

“It’s silent on that issue and that I think it’s a critical issue,” he explained.

UTAM was overseeing investments of $3 billion of faculty pensions and  $2 billion of endowment funds, according to Luste.

At Western, two different boards handle the pension and endowment funds.

“On the endowment side, the investments are managed by professional investment management firms, appointed and monitored by Western’s Investment Committee,” Martin Bélanger, director of investments at Western, said.

Western’s two boards — the Investment Committee and Pension Investments — have different goals and are managed externally.

“This strategy is very common among universities — i.e. most universities will have a small investment staff, an oversight committee, such as our Investment Committee or our Joint Pension Board, and most, if not all, of the underlying investments are externally managed by specialized firms,” Bélanger explained.