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October 5, 2017

Building future value for CBE in a charitable trust

Written By: Renee Meiller

Kurt Wulff (BS ’63) has regularly contributed appreciated securities for the past 15 years to a trust for the future benefit of the Chemical and Biological Engineering Department.

The CBE share of the trust principal has surpassed $1 million—and continues to grow with positive economic conditions. Wulff and his wife, Louise, are lifetime income beneficiaries and the principal will be distributed after they both pass away. Their planned gift is an unrestricted gift—meaning that the department can apply it to current needs, whether it be for undergraduate scholarships, graduate research, faculty recruiting or another critical designation.

Building a legacy for future generations was far from Wulff’s mind as a student under the guidance of great CBE professors such as Ragatz, Lightfoot, Crosby and DiBenedetto, among others. Favorable recommendations from them, combined with his degree from a top chemical engineering program, helped Wulff land a job as a design engineer with Chevron in San Francisco. He met and married Louise soon after his arrival in California. Within a few years, his perceptive young wife recommended that Kurt apply to Harvard Business School for an MBA.

Combining chemical engineering, oil industry experience and his business education, Wulff then worked with a Cambridge, Massachusetts, firm in energy consulting for four years. In 1971, he joined Donaldson, Lufkin & Jenrette (DLJ) on Wall Street as an oil and gas investment analyst. “The 1970s was a great decade to be an oil analyst, as most recommendations made money with the price of oil increasing more than 10-fold,” he says.

The 1980s were a challenge as oil price and stock prices declined. Drawing on an unconventional approach for the times, Wulff doggedly pursued the idea that most of the integrated oil companies would have much higher stock price if production operations were separated from downstream refining and chemicals. Those companies that resisted “restructuring,” as he called it, became takeover targets.

However, Wulff advised activists Boone Pickens, Carl Icahn, Gordon Getty and Richard Rainwater, who then drove the transformation of the oil industry toward fewer integrated companies and stronger independents. Over the next two decades, the new entrepreneurial independent producers also developed the fracking technology that transformed the United States from an importer of high-price oil and natural gas to an exporter of low-price oil and gas.

In 1988, the College of Engineering honored Wulff with its Distinguished Service Award, citing him as a recognized national business and financial analyst in the domestic oil and oil exploration fields. Through Wulff’s insight, many of America’s larger oil conglomerates have been restructured into the more efficient oil production and exploration companies of today.

At the same time, Wulff also restructured himself to become an independent analyst with McDep Associates, a company he created in 1987 and named after the analytical ratio for valuing oil and gas stocks. Clients paid McDep in “soft dollars” by directing securities commissions to a subsidiary of DLJ newly formed to facilitate compensation for independent research.

The 2000s presented a second-in-a-lifetime oil opportunity coincident with new demand for independent research. Rising oil prices sparked interest among investors who could now find McDep on the internet. At the same time, McDep was uniquely qualified to provide independent research to Wall Street brokerage houses who were required to buy outside research in settlement of conflict of interest issues.

Now the 2010s, like the 1980s, are a decade of lower oil prices. Yet, U.S. oil and gas producers have more positive volume growth prospects today than in the past. As a result, Wulff continues to be active, combining the technical understanding learned as a chemical engineer with business experience to help investors make money. “A further goal is to share financial rewards with succeeding generations,” he says, of his commitment to giving back to the department that is the foundation for his career success.