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Background: Management firm part of new system

STANFORD -- As part of an administrative reorganization announced in October, the Stanford Management Co. is taking over functions of the Treasurer's and Real Estate offices. It will report to an independent board of directors appointed by the Stanford Board of Trustees.

The other half of the financial reorganization is creation of the position of chief financial officer, overseeing financial policy and systems, control and audit functions, as well as risk management. William F. Massy, who holds the position, has said that when a replacement is found for him, he will devote full time to his position as head of Stanford's Institute for Higher Education Research. The chief financial officer serves as liaison between the University and the management company.

Announcing the reorganization, Massy said the independent company "will position Stanford for the investment climate of the 1990s, which requires more depth of expertise and the ability to move quickly as opportunities arise."

Harvard, Princeton and Duke have management companies similar to the new Stanford organization.

At $1.9 billion, Stanford's endowment ranks fourth in size behind those of Harvard, Yale and Princeton. While the return on investment has been down lately, reflecting the national recession, it significantly exceeded target during most of the 1980s.

Laurance R. (Laurie) Hoagland Jr., newly appointed chief executive officer of the Stanford Management Co., will oversee management of three resources:



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