Endowment Earns 1.3 Percent in Turbulent Economic Times
Story posted October 02, 2008
Bowdoin College's endowment earned a 1.3 percent net investment return for the fiscal year ending June 30, 2008, with three, five, and 10-year annualized returns of 14.2 percent, 14.8 percent and 10.1 percent respectively.
Bowdoin's performance is in the top quartile of college and university returns for the one- and ten-year periods, and in the top decile for the three- and five-year periods, according to Cambridge Associates, a firm that tracks the performance of endowment funds nationwide.
The June 30 market value for the endowment was $831.5 million, up from $827.7 million at the end of the 2007 fiscal year. Spending from the endowment in 2008 supported approximately 24 percent of the College's $117 million operating expenses.
"These returns are modest when compared to gains in recent years, but they come during a time of significant market turbulence when the S&P 500 saw a decline of more than 13 percent and when many of our peers have seen a decline in the value of their endowments," said Bowdoin President Barry Mills.
"Positive returns during these challenging times are a tribute to our very skilled professional staff, trustee leadership, and external fund managers who continue to do an exceptional job for Bowdoin, and they send an important message to donors about Bowdoin's ability to preserve and build assets into the future."
Bowdoin's Investment Committee is currently chaired by Sheldon M. Stone. Paula Volent, CFA, is Senior Vice President for Investments at Bowdoin.
A significant portion of endowment spending provides support for financial aid and Bowdoin's practice of need-blind admissions, which permit the College to admit qualified students regardless of their ability to pay. Beginning in September 2008, Bowdoin replaced student loans with grants for all students, a move that has added significantly to the amount of money required for financial aid.
In the fiscal year ending June 30, 2008, the endowment supported approximately two-thirds of the College's financial aid budget. The Bowdoin Campaign, an effort to raise $250 million for the College by June 30, 2009, sets financial aid as its highest priority. To support Bowdoin's financial aid programs, the College will raise a minimum of $75 million in new endowment.
Bowdoin's endowment portfolio is diversified across different asset classes including domestic and international equities, fixed income, private equity, real estate and absolute return strategies. The College allocates capital to investment management firms with specialized expertise within particular asset classes.
The print and online news service Alternative Investment News has called Volent "one of the savviest investors in the non-profit world," more impressive, it reported, for the fact "that Bowdoin excels without the resources of a Harvard or Yale." That reality was discussed further by Volent in a New York Times article published last November.
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