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Lafalum

College's endowment underperforms average

Average returns for endowments this past year( ending in June 2014) averaged over 16 pct according to NACUBO and reported in the Chronicle of Higher education today. Lafayette's endowment returne was 14.4 pct. We now have a  Chief Investement Officer instead of paying an alumnus 1.4 million a year for  his underperformance.

The college over the last 5 years underperformed its own benchmarks by an average of 2%, only exceeding its benchmark in one of the five years. Last year it underperformed its benchmark by 4 pct.

The hiring of a CIO was a significant improvement in managing the portfolio, a function of the BOT.
bethlehempard

From the Lafayette website:

The College had an investment return (net, after expenses) on its total managed endowment of 14.4%. Year-over-year changes in the Endowment’s actual market value include the investment return, less the draw from the Endowment in support of the College’s operations, plus or minus any additions or deductions. The College’s Total Endowment and Similar Funds was approximately $879.3 million at the end of the fiscal year. Total net assets were $892.6 million as of June 30, 2014, compared to $794.8 million as of June 30, 2013. Additional information regarding the College’s assets, investments, and endowment is included in the footnotes of the College’s audited financial statements.
BPard

IIRC, the benchmarks are custom blends. Has this blend or the benchmarks themselves changed over time? Will they under a CIO? Again, IIRC, that benchmark was a much different blend than the endowment's actual asset allocation. Its been a while since I checked, but the choice of the benchmark didn't make much sense to me.

Any indication as to the CIO's strategy and preferred allocation?

Also, are funds invested differently if they're in the general endowment pool vs. restricted trusts and separately invested funds, etc? Does the CIO  control those separately invested funds or does some other group (e.g., the donors)?

At least the campaign should take us well over the $1bn mark until the next market crash!
Lafalum

BPard wrote:
IIRC, the benchmarks are custom blends. Has this blend or the benchmarks themselves changed over time? Will they under a CIO? Again, IIRC, that benchmark was a much different blend than the endowment's actual asset allocation. Its been a while since I checked, but the choice of the benchmark didn't make much sense to me.

Any indication as to the CIO's strategy and preferred allocation?

Also, are funds invested differently if they're in the general endowment pool vs. restricted trusts and separately invested funds, etc? Does the CIO  control those separately invested funds or does some other group (e.g., the donors)?

At least the campaign should take us well over the $1bn mark until the next market crash!


The benchmark is the 60% s and p 500 10 Ecafe and 30 % Barclays Capital Aggregate. They measure the performance for the last ten years against the Benchmark so it indicates to me the Benchmarks have not changed. The returns are on the "Managed Funds" so I do not know what that includes. I presume that does not include separately managed funds. The new CIO has not opined on his investment strategy. My impression there are donors that control the separately invested funds. ( Perhaps money waiting to be allocated and trusts )
bison137

Re: College's endowment underperforms average

Lafalum wrote:
Average returns for endowments this past year( ending in June 2014) averaged over 16 pct according to NACUBO and reported in the Chronicle of Higher education today.



It's not a big difference, but as I read the NACUBO report I think the average return was 15.8%.    FWIW Bucknell ended up at 15.4%.   Hard to compare them though without knowing the components and risk.

http://www.bucknell.edu/Documents...ffice/Fall2014EndowmentReport.pdf

Bucknell had a record draw on the endowment this year, with six new buildings in progress or just completed.


One question.   I have noticed in recent years that NACUBO always shows a lower endowment for LC than what is reported by the college.   For example, at June 2013, NACUBO (and other public sources) show about $719M while LC reports about $762M in "endowment and similar funds".   Is the difference the "similar funds", and if so, what are they?
Lafalum

Re: College's endowment underperforms average

bison137 wrote:
Lafalum wrote:
Average returns for endowments this past year( ending in June 2014) averaged over 16 pct according to NACUBO and reported in the Chronicle of Higher education today.



It's not a big difference, but as I read the NACUBO report I think the average return was 15.8%.    FWIW Bucknell ended up at 15.4%.   Hard to compare them though without knowing the components and risk.

http://www.bucknell.edu/Documents...ffice/Fall2014EndowmentReport.pdf

Bucknell had a record draw on the endowment this year, with six new buildings in progress or just completed.


One question.   I have noticed in recent years that NACUBO always shows a lower endowment for LC than what is reported by the college.   For example, at June 2013, NACUBO (and other public sources) show about $719M while LC reports about $762M in "endowment and similar funds".   Is the difference the "similar funds", and if so, what are they?


I'll have to look at the Nacubo figure but Lafayette itself on it's website includes cash ( about 40 million) in it's total number and then breaks it off in describing its investments. It's unclear to me whether the cash component is included in the calculation of yield. I don't believe it is. I have always liked the presentation by the Bucknell Cio, though in recent years there has been far more disclosure by Lafayette than during the Rothkopf years when most operating data was kept close.

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