October 02, 2008

Endowment avoids landmines

In this week’s Student, Managing Editor Jonathan Thrope ‘10 brings us news that many have been waiting to hear.

Amherst’s endowment grew 4.6% in its latest fiscal year, which concluded in June. The endowment total now stands at $1.7 billion.

Given the recent turmoil in the financial markets, this is a very good (and comforting) return. The article notes how things have changed for college endowments from just a year ago. Many schools took a hit.

Amherst’s rate of return dropped dramatically from last year, when it pulled in a 27.8-percent return, the second highest rate of any college or university in the nation. Yet Amherst is not alone. Across the board, colleges and universities saw significant drops in their returns (see graph) as the economy took its initial turn towards the worse at the end of the fiscal year. Last year, Yale topped the charts with a 28 percent return, but this year its rate dropped to 4.5 percent. Similarly, Harvard’s fell from 23 to 8.6 percent, although it has stolen Yale’s place as the year’s top grower. Some schools even lost money this past year, as rival Williams College’s endowment dropped five percent and the University of Pennsylvania’s 3.9.

Time will tell whether or not these results will silence calls in corners of Congress for a 5% endowment spending floor.

The article credits the diversification of the school’s investments for the strong performance compared to the broader market, but the quotes from CIO Mauricia Geissler discussing diversification are not contemporaneous with the release of the Treasurer’s report. The article apparently featured a chart that was not reproduced in the online version of the paper.

A quick internet search did not yield the actual report. If anyone could paste a link in the comments, we would appreciate it.

Dave Nardolillo '98 | October 2, 2008 09:25 PM | Administration | Alumni

James Dubick '99 | October 4, 2008 03:16 PM:

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