While the 2009 financial crisis prompted Ivy league institutions to restructure budgets and make serious cutbacks, Ivy League endowments for the 2010 fiscal year which ended June 30 demonstrate strong investment returns and an increase in value. The rise in endowment values is largely a result of strategic actions taken by Ivy League institutions to expand portfolios and redistribute privately invested assets, according to associated college newspapers.
The College reported a 6 percent increase in endowment value during the 2010 fiscal year, rising in value to almost $3 billion as of June 30, The Dartmouth previously reported.
Following these heavy losses, the College pursued a detailed review of its endowment, The Dartmouth previously reported. The College plans to allocate resources away from real estate and private equities and more towards U.S. public equities.
Other Ivy League schools that have seen endowment increases this year have followed a similar pattern of reallocating resources toward more liquid and publicly traded assets, according to several college and university newspapers. Publicly traded assets have generally seen greater returns this year than alternative investments, according to The Harvard Crimson.
The opposite approach investment in illiquid assets rather than large funds was what led to the significant losses following the market crash of 2008, according to the Crimson.
Yale University's endowment brought in an 8.9 percent investment return for this fiscal year, increasing the fund's value by 2.5 percent to a total of $16.7 billion based on gifts from donors, investment gains, adjustments and operating budget distributions, according to a release from the Yale Office of Public Affairs and Communications.
David Swensen, Yale's chief investment officer, created the University's investment model, which relies on assets such as commodities, real estate and private equity, according to Bloomberg. The University has continued to use the model, even after Yale's endowment value fell in fiscal year 2009.
The release reported losses from real assets, including holdings of real estate, oil and gas, and timber, citing the "weak economic environment" as responsible for the poor returns.
Despite these setbacks, Yale reported the rebound of its private equity portfolio from "crisis-induced losses" to a "robust return" of 18.1 percent, according to the release.
Harvard University reported an 11 percent increase in its endowment to $27.4 billion, according The Crimson.
Jane Mendillo president and CEO of the Harvard Management Company, which manages the University's endowment has worked to loosen the endowment's investments in private equity and hedge funds made by her predecessors from 2005 to 2008, according to Bloomberg. She has also worked to restructure Harvard's real estate holdings and increase investments in natural resources and timber.
Mendillo told The New York Times that Harvard's endowment will remain a "diversified portfolio that includes alternative investments in private equity, hedge funds and real estate, but it now has about 10 percent more of its portfolio in more liquid instruments."
Cornell University's endowment also increased this year, and the University announced a 12.6 percent rise in value from $4 billion at the end of June 2009 to $4.4 billion on June 30, 2010, according to The Cornell Daily Sun.
James Walsh, Cornell's former chief investment officer, attributed the original fall in endowment funds to a "sharp reduction in liquidity in the market, which meant there was no safe asset except for cash and fixed income," according to The Sun.
Cornell's investment office and the investment committee of the University's Board of Trustees has reallocated assets in areas such as "distressed debt and credit strategies," Cornell investment committee Chairman Paul Gould said in a University press release.
Princeton University reported the need for endowment spending cuts in departments' non-personnel administrative budgets as well as a contraction in University size among other budget planning measures to counter a decrease in endowment value, according to a letter University President Shirley Tilghman sent out in April 2009.
Princeton announced in the July 7 issue of the Princeton Alumni Weekly plans to create a "liquidity fund separate from the endowment and invested conservatively that will serve essentially as an insurance policy,'" that will grow gradually over time.
Princeton has yet to post endowment returns for the fiscal year.
Brown University's endowment will increase in value by an average of 5.9 percent between July 2001 and June 2011, excluding gifts, according to Beppie Huidekoper, executive vice president for finance and administration at Brown.
While Brown has not yet released its endowment figures for the most recent fiscal year, the University has reported a plan to draw less from its endowment this year and to reduce payout by about 20 percent from the last fiscal year, Huidekoper told The Brown Daily Herald. Payout is measured as a percentage of the endowment's average value over the previous three years, according to the article.
Columbia's endowment reported a 17 percent return and totaled $6.5 billion as of June 30, according to the Columbia Daily Spectator.
With this level of return, Columbia hopes to restore missing resources and increase salary for faculty and staff, as well as funding for financial aid, the Spectator reported.
The University of Pennsylvania reported a 9.6 percent endowment increase in fiscal year 2010. Penn announced an initiative to control expenditures in December 2008, focusing energies on controlling human resources activities, limiting "discretionary expenditures" and working carefully on investment projects to counter the recent external economic downturn, according to The Daily Pennsylvanian.
Penn's portfolio is atypical of large endowments, due to its lack of private equity, real estate and natural resources, Chief Investment Officer Kristin Gilbertson told Bloomberg.
Without a liquidity problem, Penn worked to "reposition [its] portfolio, but nothing major," Gilbertson told The Daily Pennsylvanian.
