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Nazarbayev University to have Kazakhstan’s first higher-education endowment fund

By Hal Foster
Universal Photo
Nazarbayev University will become Kazakhstan’s first higher-educational institution with its own endowment

ASTANA - Thursday, January 27, 2011 - Nazarbayev University is rapidly becoming an institution of firsts.

The institution named for President Nursultan Nazarbayev is the first in Kazakhstan to focus on applied science. The president wanted a science program that would help generate products rather than simply expand general scientific knowledge.

Nazarbayev University also will be the first higher-education institution in the country with the ability to determine its own programs and courses. The president signed legislation this month exempting the university from having to follow Ministry of Education guidelines.

The university is also working on another milestone: it will become Kazakhstan’s first higher-educational institution with its own endowment. The legislation providing for special status also authorized the endowment fund.

The fund is expected to be operating in the second quarter, according to a source familiar with the situation who asked not to be identified.

Endowments, which are tools for financing teaching and research, are one reason why a number of American universities have become among the best in the world. The U.S. university with the largest endowment, Harvard, has a whopping $25 billion to use to improve its programs and facilities.

Those spearheading the Nazarbayev University endowment effort must first become acquainted with overseas universities’ endowments, then come up with an organizational structure for the fund, an investment strategy and a fundraising strategy, according to the source familiar with the situation.

A key to its early investment success will be choosing a good asset management company, the source added.

Those managing the endowment effort need to soak up “a lot of knowledge about managing an endowment fund,” the source said. “This is something new” for Kazakhstan, he noted.

Great Britain’s renowned Cambridge Associates investment advising company will be providing the Nazarbayev University endowment fund with ideas for an organizational structure, an investment strategy and a fundraising strategy, Central Asia Newswire (CAN) has learned.  Cambridge won an international bid for the consulting work.

The World Bank is another source of technical expertise that those spearheading the Nazarbayev University endowment effort expect to tap, CAN has learned.

It’s too early for those leading the endowment effort to say much about potential investment strategies, according to the source familiar with the situation.

The endowment fund also needs “to have a sound fundraising policy,” the source said.

Because Nazarbayev University is only one semester old, it can’t embrace the American approach of seeking donations from alumni, the source pointed out.

It’s almost certain the fund will seek donations from some of Kazakhstan’s world-class companies, such as its petroleum and mining giants, the source said.

An unanswered question at the moment is whether the fund is likely to seek investments from abroad as well as from Kazakhstan. Overseas investments are a good possibility, the source said.

Another important question is whether the endowment fund will seek investments from the government – from the Samruk-Kazyna sovereign wealth fund, for example. It’s premature to think about that as well, the source added.

Still another question is whether investments should be in the Kazakhstan tenge, other currencies or a mixture.

These questions and others will be answered in coming months.

But one thing is certain: with Nazarbayev’s name on the fund, it will be a first-rate operation.

The president won’t have to verbalize that message. Everyone connected with the fund will understand it, however.

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