We know that Dartmouth students aren't big fans of hedge funds, but it turns out the university's faculty aren't too keen on them either.

A group of Dartmouth professors and employees are requesting that New Hampshire state launch an investigation into how the college's board of directors is funneling Dartmouth's endowment money into their own hedge funds, venture capital and private equity firms. The group sent a letter to the General Attorney of New Hampshire in February notifying the state of the alleged conflicts, which they assert are in violation non-profit laws in the state.

The letter then lists a group of 10 Dartmouth trustees—out of 23 people on the board—that have ties to the investment industry and details how much of Dartmouth's endowment are invested their funds. The list of names include well known PE exec Leon Black of Apollo Management and hedge funder Steve Mandel of Lone Pine Capital.

In addition, the money invested with the directors' firms have abysmal returns and do not benefit the university. From the letter (read the entirety here)—

The pattern that the Dartmouth trustees and members of the Endowment/Investment committee have engaged in for decades is clear. That pattern is that a donor/investment manager’s pledge to support Dartmouth is reciprocated with an investment of ever increasing proportions in the donor’s firm, lending the credibility of an Ivy League institution to the firm. The investment returns are of little import; most of these alum/donor/investment manager returns are average to poor.

For what it's worth, Dartmouth's board of director does have one of the highest concentrations of MBAs among Ivy League school boards, according to The Dartblog. In addition, it's not the first time that the conflicts of interest in Dartmouth's board have been brought to light—the 2010 research report from the Tellus Institute also noted Dartmouth's questionable investment strategy, but the Dartblog points out that the new letter goes into much more detail about Dartmouth's trustees.