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Lafalum

Lafayette audit report from Grant Thorton available online

The audit dated Oct 2, 2008 for the fiscal year ending June 2008 is not encouraging. It shows a decline in the size of the portfolio of 97 million dollars (646 mio vs 747 mio is total change in the portfoliio) This of course is before the sept -oct meltdown. It also shows the liquidity in the majority of hedge funds at greater than 90 days which means we can't get out for at least 90 days. The amount of these illiquid funds is 253 mio dollars. There are  limited partnerships   which the college has committed  171 mio dollars of which 100 mio is still to be advanced.( There is 94 mio in cash and short term investments perhaps to meet this obligation...there was 56 mio the year before) However, there is another amount of these committments in 2007 and it is not clear if that is an additional amount or included in the 2008 number. In a portfolio of 646 mio dollars I think this is a far too large an amount to be committed to these type of investments. ( My opinion) Total debt is is 168 mio dollars.
There a several sources for investment income. There is an operating account that is used for drawing for operating purposes. I assume this is very short and liquid and reflects short term returns and  interest. But I am no expert in reading balance sheets of non profits.
The net change in unrealized gains and losses is 96 mio. The non operating accts show losses of 75 mio. Netting the operating and non operating accts ( I'm not sure that is the right way to view a long term portfolio) reduces the losses to 40 mio at the end of June.
You can google the report by going to" lafayette college form 990 for 2007"
There is great detail in the report.

Clearly the information I had about a 4 % decline was wrong, it was worse. Perhaps he was looking at the net of the operating and non operating accounts, but on both accounts he would have been wrong.
ranger

Actual numbers, Can we handle the truth? Bye,Bye Weiss and current BOT. Will the BMW's go up for auction? Will we continue to hire Diversity VP"s etc.? Is it time to go to 14 Patriot League sports-other 9 become club sports with more student input. How have Weiss hires fared so far?
ericatbucknell

i will admit that i found the previous thread a bit comical as virtually every similarly-sized endowment was down a percentage similar to what was being thrown around.

however, it appears that the numbers werent right. i have yet to see another school post this kind of loss for last fiscal year. bucknell was down around $44 million and holy cross $29 million with slightly smaller endowments. lehigh may have been flat, though that may simply be a result of poor reporting in the school newspaper.

based on what i have seen to date from other schools, i would expect the endowment to be down 20-25% since the end of june.
Lafalum

ericatbucknell wrote:
i will admit that i found the previous thread a bit comical as virtually every similarly-sized endowment was down a percentage similar to what was being thrown around.

however, it appears that the numbers werent right. i have yet to see another school post this kind of loss for last fiscal year. bucknell was down around $44 million and holy cross $29 million with slightly smaller endowments. lehigh may have been flat, though that may simply be a result of poor reporting in the school newspaper.

based on what i have seen to date from other schools, i would expect the endowment to be down 20-25% since the end of june.


I think your 20-25% will hold  up, In our case because of the large amount in hedge funds there is a lot of anxiousness. In the audit report the auditor said the evaluations were done by the hedge fund manager. Yes we had spectacular returns in previous years which makes this year all the more worrisome as some of us think those returns were made by being "out of the zone of prudence".  Several days ago (Oct 27 I think) the Philadelphia Inquirer did a piece on  endowments of local colleges. Unlike many of our  brethren Lafayette refused to state their endowment losses. That just makes us  more nervous. Hey, maybe we are geniuses' and actually made money.( see www.philly.com/philly/business/33318894.html)  
I view the donors like stockholders.....they are entitled to timely,accurate,and honest reports of results. As stated in the above thread if you add the two accounts together  you get a net of 40 mio loss through June 30 but given we were left with  huge unrealized losses in stuff which probably fared the worst in sept and oct..that bothers me. But maybe I'm wrong but why not disclose what other schools have disclosed!!
TheTruth

ericatbucknell wrote:
i will admit that i found the previous thread a bit comical as virtually every similarly-sized endowment was down a percentage similar to what was being thrown around.

however, it appears that the numbers werent right. i have yet to see another school post this kind of loss for last fiscal year. bucknell was down around $44 million and holy cross $29 million with slightly smaller endowments. lehigh may have been flat, though that may simply be a result of poor reporting in the school newspaper.

based on what i have seen to date from other schools, i would expect the endowment to be down 20-25% since the end of june.


On the Lehigh board, someone alluded that they may be down $200 million.  I think everyone is still trying to figure to where their endowment is right now.  Like I mentioned earlier, expect more colleges to announce hiring freezes and cut backs.  I just we can keep the tuition increase down.
ericatbucknell

TheTruth wrote:


On the Lehigh board, someone alluded that they may be down $200 million.  I think everyone is still trying to figure to where their endowment is right now.  Like I mentioned earlier, expect more colleges to announce hiring freezes and cut backs.  I just we can keep the tuition increase down.


they are: http://media.www.thebrownandwhite...ature=recentlycommentedstoriestab

what is unknown is whether some of that loss is similar to lafayettes from last year, a function of both real losses and the effective conversion of some funds to cash and short-term investments.

as far as tuition goes, i wouldnt anticipate schools keeping increases down. every additional dollar lafayette (or any school) can receive in tuition revenue from a truly wealthy student represents an additional dollar in financial aid that can be given to needier (low/middle income or even upper-middle income) student. as an example, a $5000 tuition increase paid only by the wealthiest quarter of the student body could be reflected in an additional $1666 in financial aid for EVERY other student on campus without any additional burden on annual giving or the endowment. in other words, half of current full-pay students would actually see a decrease in costs without impacting tuition revenue.
TheTruth

In other words, students who can pay the full price will  have their choose of schools this year.
Lafalum

I now have strong reason to believe the Lafayette losses are near the announced losses of Lehigh. (we have a smaller portfolio 642 vs 1 billion) That's all I will say at the moment.
Lafalum

Dartmouth is announcing actual staff reductions. In light of our losses, we are starting to look a little silly. People will understand the need  for cutbacks ( and for sales of BMW"S) They will not understand business as usual.
Also it is time to reconsider the wisdom of continuing our retainment of our portflio mgr who is getting paid more than the our president!! (the college and US combined actually)
Is it time to start considering resignations from the BOT. Certainly if they don't soon start telling the truth as others have ( Lehigh, Harvard,Yale,Princeton,Williams et al), my lack of confidence in this group will be justified.
carney2

Lafalum wrote:
Is it time to start considering resignations from the BOT. Certainly if they don't soon start telling the truth as others have ( Lehigh, Harvard,Yale,Princeton,Williams et al), my lack of confidence in this group will be justified.


Frankly, my confidence in this bunch left me years ago when they did back to back to back hirings of the three stooges, Ellis, Rotberg and Rothkopf.
ranger

There were and are actually 4 stoogies. The losses top $200 Million, but this administration continues to act like all is well. When the numbers are finally disclosed alumni will wonder why we were not told the truth. Remember, honesty is the best policy. Cover-ups are worst than the hard facts in the end. We will get mad and even.

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