Unprecedented Gift Will Rename Business School

by Libby Morse
Published: November 6, 2008
David and Suzanne Booth

Image courtesy of David and Suzanne Booth

David Booth, ’71, has always said that he built his investment firm, Dimensional Fund Advisors, on principles he learned at the University of Chicago Booth School of Business. Now he, his wife Suzanne, and their family have returned the favor by making the largest donation in the university’s history — and the largest ever to any business school.

The Booth gift includes an economic interest in shares of Dimensional Holdings, Inc., parent company of Dimensional Fund Advisors. The business school will receive an income stream from the shares based on Dimensional’s performance and the terminal value of the shares if they are sold. The combination of up-front payment, income stream, and equity provided by the Booth gift is valued at $300 million.

In recognition of the gift, the school is being renamed the University of Chicago Booth School of Business.

“Given the profile of our school and its role in the world, it is imperative that the person who names the school embodies its values and, moreover, is a person who is of great integrity and who commands respect,” said dean Edward Snyder. “In David Booth, we have a person who exceeds all the relevant criteria.”

Booth and Dimensional co-founder Rex Sinquefield, ’72, have become legendary in finance circles for rejecting active management and stock picking. Instead, they base their investment management approach on the efficient markets theory of their Chicago finance professor, Eugene Fama, ’63, PhD ’64. President Robert J. Zimmer called Booth’s gift a vivid illustration of the power of ideas.

“This gift is extraordinary in both its generosity and its endorsement of the university’s mission,” said Zimmer. “The relationship between David Booth and Eugene Fama — and the idea that captivated them both — is another example of how groundbreaking theory, rigorous examination, and application of principles come together often at the University of Chicago.”

Booth entered the business school’s doctoral program in 1969 and was both a student and teaching assistant of Fama. Rather than continuing with his plan to embark on an academic career, he decided to apply his training to the real world. He founded Dimensional with Sinquefield in 1981. Fama, the Robert R. McCormick Distinguished Service Professor of Finance, was one of the first members of Dimensional’s board of directors and also serves as director of research.

"This gift is extraordinary in both its generosity and its endorsement of the university’s mission."
—President Robert J. Zimmer

 

The firm now manages about $120 billion for institutional investors and clients of financial advisors. The firm has U.S. offices in Austin, Chicago, and Santa Monica, and international offices in London, Sydney, and Vancouver.

The business school plans to use the money for several new initiatives including aggressively attracting and retaining star faculty. Other uses being considered include developing new faculty groups in academic areas not normally associated with business schools, expanding existing research centers, and launching ambitious programs to better leverage the school’s intellectual capital.

Booth, who is also a trustee of the university, played a leadership role in the campaign to build the Charles M. Harper Center on the school’s Hyde Park campus. In addition, Booth individually and Dimensional as a company have endowed several chaired professorships, provided start-up funding for the business school’s NASDAQ database, and underwritten doctoral stipends, faculty research, and prizes for term papers. In 1999, the business school honored Booth and Sinquefield with the Distinguished Entrepreneurial Alumni Award.

A native of Texas, Suzanne Deal Booth is the founder and director of Friends of Heritage Preservation, a nonprofit organization based in Los Angeles that is dedicated to the recognition, preservation, and conservation of artistic and cultural heritage. She currently serves on the board of the Los Angeles County Museum of Art and numerous arts-related boards and committees, including the Art Committee for the University of Chicago Booth School of Business.

 

Last Updated 5/14/09