Carrie Thome
A preternatural silence has surrounded the departure of one of the highest paid executives on the UW-Madison campus. It’s one more sign of the big changes rocking the Wisconsin Alumni Research Foundation, UW’s independent patenting and licensing operation.
Carrie Thome, WARF’s award-winning chief investment officer who rose to power under WARF’s previous managing director Carl Gulbrandsen, left her post in June after 18 years with the foundation. Her compensation package topped $1.2 million in 2017, the last year such data is publicly available.
Briefly noted in the niche financial media, Thome’s low-key exit has gone unmentioned by Wisconsin news outlets. On July 1, Chief Investment Officer magazine quoted a WARF publicist as saying that Thome’s “transition” was a personnel matter and that WARF would not comment beyond that.
Thome did not return my messages. (Her LinkedIn page describes her as self-employed and a consultant since July.) Erik Iverson, who replaced the retired Gulbrandsen in 2016, was not available for comment. WARF’s board chairman James Berbee did not respond to an interview request.
Thome, who joined WARF in 2001 after a stint with the Wisconsin Investment Board, presided over a huge investment portfolio — $2.78 billion as of 2017. Established in 1925, the WARF endowment supports various UW-Madison and Morgridge Institute for Research programs with sizable yearly grants. According to the 2017 federal disclosure form, the portfolio included $1.72 billion in hedge fund investments, $659.4 million in money market funds, $346.7 million in private-equity limited partnerships, $29.8 million in fixed-income vehicles, and $19.7 million invested in WARF startup companies.
Keep that $19.7 million figure in mind.
In 2015, Chief Investment Officer magazine presented the Industry Innovation Award for foundations to Thome and WARF. The WARF team was praised for its investment strategy and high returns. Gulbrandsen described Thome’s leadership as “strategic, innovative and exceptional.”
A Milwaukee money manager who looked at performance data recently released by the magazine told me not enough is known about WARF’s investment history to come to a solid judgment of Thome’s performance. But his sense is that “the last five years have not been good for the foundation.”
Last fall I reported how WARF, after decades as a pre-eminent university technology- transfer agency, had lost momentum. The foundation’s last cash-cow patents for a kidney-disease drug called Zemplar — worth, literally, hundreds of millions of dollars over the years — had expired. A half-billion-dollar award WARF had received in a patent-infringement case filed against Apple had been overturned in court.
And more to the point, critics told me that WARF’s game plan had simply gotten stale. WARF trustees were overly focused on generating investment earnings from its endowment, said Milwaukee private-equity investor John Byrnes, when they should have been pushing harder to commercialize the great UW research for public benefit.
Patent earnings were dropping, said business consultant Kay Plantes, because WARF was marketing its licenses as if it were “a catalogue sales company.” Madison investor Allen Dines told me WARF had missed a major shift in tech innovation: That corporations were no longer licensing promising but unproven university patents, but were instead investing in startups that were figuring out how a professor’s breakthrough research translated to product development.
This was not a strong point of the pre-Iverson WARF. The $19.7 million invested in WARF startup companies amounted to less than 1 percent of the foundation’s investments in 2017.
With trustee support, Iverson has championed change at the foundation, focused on nurturing startups and entrepreneurism.
Michael Partsch, who managed medical-device startups in San Francisco, was anointed WARF’s first chief venture officer. WARF is pledging to invest a total of $100 million in campus-inspired startups. Partsch’s work is expected to reinforce a critical component in Iverson’s strategy — developing life-saving therapeutics derived from UW-Madison research.
Creating a new Zemplar, in other words.
“Tech transfer is bloody hard,” Iverson told me last year. But he had “enormous optimism” that WARF would succeed. What he thinks now on replacing Thome is not known. Jeanan Yasiri Moe, WARF’s director of strategic communications, emailed me “it is premature to have a discussion on this.” She said that Iverson and the board “will be considering next steps in the months to come.”
In the interim, Alain Hung, WARF’s deputy chief investment officer, has been put in charge of the bounteous portfolio.
Marc Eisen’s reporting on technology transfer at UW-Madison can be found at isthmus.com/topics/uws-challenge