Penn posts $1 billion endowment return

After rocky 2009, Fiscal Year 2011 marks second straight year for positive return

· September 18, 2011, 1:37 am   ·  Updated September 20, 2011, 2:33 am

Elizabeth Jacobs | DP

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Penn’s endowment is on the rise.

The University announced at a Board of Trustees meeting on Thursday that its endowment return — which indicates how well its investments performed — for Fiscal Year 2011 was 18.6 percent.

Penn’s FY 2011 ended on June 30.

This marks the second consecutive year in which Penn’s endowment yielded a positive return, following a dip in FY 2009.

While the University saw its investments fall 16 percent in FY 2009, it fared relatively well compared to peer schools. During that time, Harvard and Yale universities — which boast the two largest endowments for higher education institutions in the nation — saw their endowments drop 27 and 25 percent, respectively.

“We are thrilled with the strong positive return for the fiscal year and even more so that the endowment has completely recovered from the drawdown experienced during the financial crisis,” Executive Vice President Craig Carnaroli wrote in an email. “This is due not only to Penn having achieved double-digit returns in each of the past two years, but also to Penn having lost considerably less than the major indices in FY 2009.”

Penn’s endowment return for FY 2010 was 12.6 percent.

At the close of FY 2011, Penn’s total endowment assets — which are primarily managed through the Associated Investments Fund — were valued at $6.58 billion, Carnaroli wrote. This marks a 16-percent increase from the end of FY 2010, when the University’s endowment totaled $5.67 billion.

This increase takes into account Penn’s investment performance, new gifts and spending during FY 2011. Investment performance added more than $1 billion to the endowment for the year, along with $175 million in new gifts. The University spent $252 million in endowment funds.

Equities contributed most significantly to the 18.6-percent endowment return, followed by natural resources, private equity, hedge funds and high-yield bonds, Carnaroli wrote.

Penn endowment total of $5.67 billion at the close of FY 2010 marked the fifth largest in the Ivy League, behind Harvard, Yale, Princeton and Columbia universities, respectively.

Peer institutions in the Ivy League have not yet released endowment returns for FY 2011.

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