Stanford, MIT report endowment gains
By Arleen Jacobius and Douglas Appell | September 26, 2011 4:13 pm
Stanford University Merged Pool, which includes its $19.5 billion endowment, returned 22.4% for the fiscal year ended June 30, while the Massachusetts Institute of Technology’s core endowment fund returned 17.9%, according to reports from each university.
Stanford’s return was up from 14.4% in the prior fiscal year, according to the university’s 2012 budget plan that includes information on its endowment and operating funds.
Overall, investment income at the Palo Alto, Calif., university is expected to be up by 7.7% for the current fiscal year ending June 30, 2012, according to a news release.
“While we’re thrilled with investment returns and endowment growth over the past two years, Stanford's endowment still has not recovered the losses sustained in 2008-‘09,” Randy Livingston, Stanford vice president for business affairs and CFO, said in the release. “We continue to be concerned about the possibility of reductions in federal research funding and an investment downturn driven by European debt problems and economic weakness at home.”
At MIT, the school’s endowment and similar funds had a combined $9.713 billion in assets for the fiscal year ended June 30, up 16.8% from the year before, according to a report from the university’s treasurer, Theresa M. Stone.
Both figures exclude pledges for endowed purposes; when pledges are included, the Cambridge, Mass.-based school’s endowment funds totaled $9.854 billion, up 16.4% from the year before.
In an effort to generate high real rates of return, the university’s investment policy favors equity investments over fixed income, with a heavy emphasis on inefficient markets, including private equity and real estate, as well as marketable alternatives, such as absolute-return strategies distressed debt and hedge funds, according to the report.
While the report didn’t provide detailed asset allocation numbers as of June 30, the university’s website lists the following targets: marketable alternatives, 28%; private equity, 25%; international public equity, 14%; real estate, 12%; real assets, 8%; domestic equity, 7% and fixed income, 6%.
The treasurer’s report noted that combined investments in equity, marketable alternatives and real estate accounted for 81.1% of the portfolio as of June 30, down from 83.7% at the end of the prior fiscal year.
Seth Alexander, the president of MIT Investment Management Co., which manages the university’s endowment funds, couldn’t immediately be reached for further comment.
Last week, Harvard University reported its endowment funds returned 21.4% on their investments for the fiscal year ended June 30, lifting the combined total to $32 billion.