By Josh Siatkowski | Staff Writer
Dave Morehead and the Baylor Investment Office don’t subscribe to the stereotypes of the finance world.
Instead of a big city high-rise, Morehead’s team works in a small red brick building in downtown Waco. Suits and ties are replaced with casual (mostly green and gold) clothes. And in an industry that’s mostly men, four out of the office’s five investment professionals are women. It all helps to focus attention on what really matters: making money for Baylor without touching students’ wallets.
“I’ve reduced the things that don’t matter,” Morehead said. “The goal is more dollars— more dollars for the school, more dollars for the students, period.”
And for the last few years, Morehead’s team has been turning their work into dollars at a better clip than most. The endowment, which was worth $2.4 billion as of Sept. 30, earned a 9.4% return for the year ending June 30 (which is coincidentally also the 10-year average return). That performance is enough to turn heads on a national scale, and it even led Morehead to win Institutional Investor’s CIO of the Year Award on Sept. 19.
“Our returns over the last five years have been particularly good — top 10 in the country,” Morehead said. “It’s like making the College Football Playoff every single year for the last five years.”
But even measurements of percentages and attention don’t mean much to Morehead. As he said, what really matters is dollars.
“You can’t pay for your tuition in percentage points,” Morehead said. “What you need is actual dollars.”
At a dollar level, the endowment currently provides Baylor about $100 million in annual spending, which accounts for 10% of the university’s budget. But that’s only the beginning of where Morehead and his team want to take the fund. In the future, Morehead said his personal goal is to triple or even quadruple that percentage.
“I would like to get the endowment funding of the budget up to 30 or 40%,” Morehead said. “That’s generally where it sits for schools in the northeast. And obviously, that gives the schools a lot of flexibility. It enables them to do things, like how if your family makes less than $100,000 per year, then tuition is free. You can do those things only to the extent that you have funding to offset that. That’s the type of thing that gets me up in the morning.”
Currently, Baylor offers full tuition coverage for a select number of students with significant financial need and an adjusted gross income under $50,000. To get that minimum threshold up to $100,000 — and ultimately reduce tuition for all Baylor students — the endowment needs just what Morehead says: more dollars. Thankfully, those dollars are continuing to come in at a growing rate. Since June, the endowment has already added $200 million. That’s approximately a 10% return for the quarter — a higher return than what the endowment has been getting recognition for earning per year.
So how does the team do it? In simple terms, Morehead said it’s a lot like hockey legend Wayne Gretzky’s advice on skating: be where the puck is going to be, not where it is.
“We want to own things that in three years, everyone’s going to be like ‘Oh my gosh, I really want that,’” Morehead said. “So we’re trying to come up with things that are going to be highly valuable in three to five years before the market recognizes their value.”
Morehead’s team examines growth industries and then identifies the bottleneck. For example, they’ve capitalized on the boom in AI data centers not by building the facilities themselves, but by owning the product that every data center needs: power.
“We have some of the largest companies that you would recognize, all wanting to buy our data center platform because we have seven gigawatts of power,” Morehead said. “We’ve been running around aggregating power because that’s the thing in short supply.”
Even with all the brainpower and analysis that goes into Morehead’s job as CIO, a financial manager is only part of the role he sees himself playing at Baylor. As a father of four who attended school on scholarships, Morehead personally knows the stress of paying for college — both his own and his children’s. It led him to become an advocate for students, not just through saving them money, but also through education and promotion of Baylor’s finance students.
Morehead taught Large and Small-Cap practicum classes from 2019 to 2024, guiding students through investment analysis and the asset management career path. Although he no longer teaches, Morehead still meets with students, like those in the Scholars of Finance organization.
Jackson, Miss., senior Stanley Qu, who served as vice president of professional development for Baylor Scholars of Finance last year, coordinated a guest lecture with Morehead in the fall.
“It all started when I opened up The Wall Street Journal one day, and the last thing I was expecting to see was a picture of Pat Neff and an article about Baylor being one of the better-performing endowments,” Qu said. “I had the idea to organize an event with Dave Morehead because I realized how lucky we are to have access to a resource like him at our school.”
A few emails later, Morehead joined the club for the evening, answering questions from portfolio composition to career advice.
“He was really responsive, and he was really willing to come speak with us,” Qu said.
Along with in-person student interaction, Morehead also has a popular LinkedIn page with almost 20,000 followers (to Morehead’s surprise), where he promotes Baylor’s finance programs and students.
“I think it’s completely bonkers that people are interested in what I have to say,” Morehead said. “I just want to elevate why an endowment is important and … elevate Baylor within the finance community at large.”
