Photo by Matt Kelly

Michael Bills

Wall Street wiz advises on endowment

By Matt Kelly

Michael Bills has come home — to U.Va.

Bills, 44, a member of the class of ’78, was named the chief investment officer at the U.Va. Investment Management Company in June. He recommends strategies for investing the University’s $1.7 billion endowment to Alice Handy, U.Va. treasurer and president of UVIMCO, who recruited him.

UVIMCO is a department of the University that reports to a committee of the Board of Visitors and has four outside board members chosen from alumni in the investment community.

Bills carries with him a stellar record in the investing field. He was a senior managing director of and head trader and chief operating officer for Tiger Management LLC, as well as vice president of the equity trading and arbitrage division of Goldman Sachs & Co., both in New York City. He is now happy to put his expertise to work for U.Va.

But his contribution to the University is not limited to recommending investments. Since 1999, he has taught investing at the McIntire School of Commerce.

Investing and teaching appeal to different facets of Bills’ personality. He enjoyed mentoring younger employees at Goldman Sachs and Tiger and he said this was part of the impetus to teach school. He said when he first started, he was not sure if teaching would generate the same level of enjoyment he got from Wall Street, but the responses from his students, especially when he helps them understand something, has made it worth it.

“We’ve all had great teachers in the past who have helped us figure things out,” he said, adding that many students are pursuing truth, ethics and honor in business.

This is the second time Charlottesville has lured back Bills and his family. During the family’s first return, from 1992 to 1995, Bills, a 1981 graduate of the Columbia Business School, also taught at McIntire. He returned to New York for four years, on a specific contract to continue work for Tiger, then the family returned here in 1999.

“I enjoy a challenge,” Bills said of going back to New York, which suits his competitive nature. But he knew he would return to Charlottesville, which has always held a place in his heart.

While Bills and his wife had gone to school here, the community did not appear on the list of places where they wanted to live until they started to raise their family. He said there were three or four communities they were looking at and Charlottesville kept working its way up the list, partially as a sentimental favorite.
“We enjoyed our time [in New York City] but it was never home,” Bills said.

Charlottesville is high intellect per capita and low pretense per capita.”

It’s also a great place to raise children, according to Bills, who has two sons and two daughters, ranging in age from seven to 14. Both Bills and wife, Sonjia Smith, (College ’79, Law ’82), graduated from high school in Hampton, where they were high school sweethearts.

Bills has also taken steps to immerse himself in the community, joining the board of the Nature Conservancy and being one of two founders of the Sorensen Institute of Political Leadership. His wife, who had practiced law in Chicago and New York, is currently doing local philanthropic work.

While Bills enjoys the quiet life of Charlottesville, there are also challenges here for him as he uses his expertise to advise Handy on investing the University’s endowment.

Bills credits Handy with the good performance of the University’s portfolio.
“I want to help her and learn some things in the process,” Bills said.

Having him on board is a benefit for Handy, who said Bill’s ability “complements resident talents.” His specialty is investing in hedge funds, an investment mechanism of aggressive strategies, including selling short, leverage, arbitrage and derivatives. However, she said his real talent is in staff development, building strong work teams, as he did at Goldman Sachs and Tiger.

Bills said he worked with talented people in his previous positions and developing those talents is important. “Just because you hire somebody who is bright does not mean they will succeed,” he said. “You have to get the most from what you’ve got.

“I want a diversity of ideas, and a strength of analysis that allows an idea to be tested to the maximum possible, using judgment and the strength of intellectual pursuit to challenge ideas, from the most junior member of the staff to the most senior, to see if we can refine it in the best possible way.

“One thing that is consistent in the academic and the investment world, [is that] I am a competitive guy. I want to win and to perform well. But I want to be proud of how I win. I want to be able to say that I did it fair and square. That is the method we use here [at UVIMCO and in class].”

Bills believes U.Va.’s honor code is crucial in both academic and real world environments. He said that one of the aspects of competing effectively in the business world hinges on whether or not people can trust you. In the investment world where knowledge is power, he transacted trillions of dollars because people knew they could trust him and he knew whom he could trust, Bills said. He thinks students should be truthful and honest as part of their own self-interest.

Bills feels his students are more cognizant of the honor code because he himself has been successful. “They think about the honor code because I say it,” Bills said. “They believe it in part because I have been in the real world and successful in a real competitive world. It gives me more credibility.”

He said with many of the students, the principles are in place, but the specifics are not and while some of the students are more focused, the confusion of youth is still resting upon them. He said the degree of affluence is greater at the University than when he was a student, bringing with it a heightened degree of expectation.

He said some of his students are well intentioned with their plans, but there are others who have a more concrete idea of what they want. He meets with all his students personally to help them sort this out and convince them that “life doesn’t have to be a grind.”

For Bills, it is good to be back at his alma mater, as a contributing member.
“This job is important because of the endowment,” he said of his role directing investments. “What performance we generate effects the scholarships and the buildings in perpetuity.”

He said while he does not raise the money or determine how it is spent, he can have a role in keeping the endowment robust, which will make donors feel good about their investment and give parents and students confidence in the University.

Handy said one of Bills’ major assets for the University, besides being an alum, is his affability.

“He’s a genuinely nice guy,” she said.