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Brandeis' endowment return lower than last year
by Matthew Brock
News | 3/4/08
Posted online at 5:21 AM EST on 3/4/08
/ Last updated at 7:03 PM EST on 3/4/08
Brandeis received a record-breaking 18.3 percent return on its endowment for the 2007 fiscal year ending last June, but has since received a much lower return in line with a national trend affecting all colleges, according to Executive Vice President and Chief Operating Officer Peter French.
Chief Investment Officer and Vice President for Investment Management Deborah Kuenstner said Brandeis' return is 1.2 percent higher than the national average of 17.2 percent that was reported in the Chronicle of Higher Education Jan. 24.
Kuenster said that Brandeis has a lot of alternative investments that can't be measured in real time, making it difficult to determine the actual return for the current fiscal year. She said there are estimates from Jan. 31, but for some investments the schools is still operating on Sept. 30 numbers.
"We can only speak with high confidence on June 30, because that's when we audit results for the fiscal year end book closing; we spend a lot of time bringing everything up to date when we close the fiscal year," Kuenstner said. However, she said that "We did pretty well through the end of December, but we gave a lot of it back in January and February."
According to Kuenstner, Brandeis makes investments for the long run, looking ahead three to five years, and will weather any economic downturn that occurs during that time.
"We are currently putting together the fiscal '09 budget and the performance of the endowment and our draw out of the endowment is very important," said French. "Our goal is to spend around 5 percent on a three-year average out of the endowment, and we're evaluating right now different scenarios in terms of what the impact of a down market will have on fiscal '09." He said that the spending encompasses practically all expenditures. French firmly stated that a struggling market would in no way affect the University's financial aid budget.
French also said that reduced endowment growth will not affect construction on campus, which is mainly funded through loans, although the nation's subprime mortgage crisis is raising the interest rates on Brandeis' loans.
Chief Investment Officer and Vice President for Investment Management Deborah Kuenstner said Brandeis' return is 1.2 percent higher than the national average of 17.2 percent that was reported in the Chronicle of Higher Education Jan. 24.
Kuenster said that Brandeis has a lot of alternative investments that can't be measured in real time, making it difficult to determine the actual return for the current fiscal year. She said there are estimates from Jan. 31, but for some investments the schools is still operating on Sept. 30 numbers.
"We can only speak with high confidence on June 30, because that's when we audit results for the fiscal year end book closing; we spend a lot of time bringing everything up to date when we close the fiscal year," Kuenstner said. However, she said that "We did pretty well through the end of December, but we gave a lot of it back in January and February."
According to Kuenstner, Brandeis makes investments for the long run, looking ahead three to five years, and will weather any economic downturn that occurs during that time.
"We are currently putting together the fiscal '09 budget and the performance of the endowment and our draw out of the endowment is very important," said French. "Our goal is to spend around 5 percent on a three-year average out of the endowment, and we're evaluating right now different scenarios in terms of what the impact of a down market will have on fiscal '09." He said that the spending encompasses practically all expenditures. French firmly stated that a struggling market would in no way affect the University's financial aid budget.
French also said that reduced endowment growth will not affect construction on campus, which is mainly funded through loans, although the nation's subprime mortgage crisis is raising the interest rates on Brandeis' loans.
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