Source: A.Grimm/Reuters
Bear facts: much more needs to be known about the crisis that cost about 70 per cent of global GDP in 2007, say scholars
What do you do if you are in a position to donate ?20 million to your alma mater’s business school and want to break some records? Add an extra ?100,000 so you can try to make it the largest sum ever donated to a UK business school, of course.
This is exactly what Alan Howard, one of the founders of hedge fund Brevan Howard, did in 2013 when he gave Imperial College Business School ?20.1 million. The amount narrowly pipped what is thought to have been the largest philanthropic gift to a UK business school – when Syrian-born businessman Wafic Sa?d gave the University of Oxford ?20 million in 1996.
These donations pale in comparison with the largesse commanded by US business schools, where contributions can reach the hundreds of millions, but they reflect a growing trend in the UK.
Last year, Anand Anandalingam, the new dean of Imperial’s business school, arrived from the US bringing with him significant expertise in raising money from donors. Professor Anandalingam told Times Higher Education that this experience is part of the reason Imperial hired him. “In the US deans spend at least a third of their time doing fundraising; it is part of the culture,” he said.
It’s a tradition from across the pond that he and the college’s new US-born president, Alice Gast, are hoping to foster at the university.
“The fact of the matter is that the money that government spends on higher education, especially at top-notch universities, is a small fraction of our budget so we have to find ways of funding the mission of the university,” he explained.
In the meantime, Mr Howard’s ?20.1 million donation has been used to establish the Brevan Howard Centre for Financial Analysis, which Chancellor George Osborne opened in September. The centre will research financial stability and regulation, financial-system structure and the financing of non-profit areas such as healthcare and preserving the environment.
It seeks to answer big questions about the global financial crash and why it happened so that future crises can be prevented. With this addition to the business school, Professor Anandalingam hopes to create one of the best finance departments in Europe. A key objective was to find “top-notch” academics to run it.
The two people they found are among the world’s best finance scholars, he said. The director of research is Douglas Gale, previously professor of economics at New York University, and its executive director is Franklin Allen.
Professor Allen, previously at the Wharton School at the University of Pennsylvania, said that much more needed to be known about the global financial crisis, which had caught everyone, including most academics, off guard. “One estimate that I heard recently was that the cost of the crisis has been about 70 per cent of global GDP in 2007, which is enormous,” he said.
Professor Allen was attracted to the position because of the “unique opportunity” it offered. It also gave him the chance to return to England, where he grew up. He moved to the US in pursuit of academic opportunities in the 1970s after completing a PhD at Oxford because jobs were thin on the ground in the UK. He sees himself as one of the pioneers of a new trend in people moving back to UK higher education from the US.
The resources available for research and the potential impact of the centre factored into his decision to make the move, as did its location in London at the heart of the financial services industry.
“It is important to spread academic research around the world and not just to focus on the US,” he said.
The Howard donation will be spent over 10 years. Part of the centre’s remit will be to engage with policymakers and the financial services industry to disseminate its findings, and it will hold lectures and seminars to do this. Over time more researchers will be recruited at the postdoctoral and PhD level and the centre will also draw on the expertise of academics working elsewhere at Imperial and at other institutions.
Professor Allen added that the centre will add a “crucial” aspect to the education of business school students.
“One of the skills that the students we train going forward need, is to be able to think through the likelihood of a crisis and how they should run their firms if a crisis does occur,” he said.
In numbers
10 - The number of years over which the Howard donation will be spent
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