After a steep drop that reflected the financial crisis last year, Penn’s endowment has shown significant improvement for Fiscal Year 2010, posting a 12.6-percent return on investment.
The University’s endowment is now valued at $5.669 billion — up from $5.171 billion on June 30, 2009. This is a 9.6-percent increase, which is due to investment gains, new gifts, transfers and spending.
At Penn, as at most other institutions, the fiscal year begins on July 1. The endowment return indicates how well the sum of the University’s investments performed — and, implicitly, the University’s overall financial health.
According to Chief Investment Officer Kristin Gilbertson, credit-related investments and traditional public equities were the major factors in the endowment’s rebound.
Recent reports place Penn’s 12.6-percent endowment return in the middle range of those of peer institutions.
The Yale Daily News reported Friday that Yale University’s endowment posted an 8.9-percent return.
Harvard University’s endowment — the largest in higher education — returned 11 percent, while Columbia University’s returned 17 percent, according to Bloomberg News.
Penn President Amy Gutmann praised Gilbertson and her team for steering the endowment toward such a positive return.
The endowment’s success is “really helping the University succeed in achieving its highest priorities … [it] is better for every part of the University,” Gutmann added.
The endowment’s growth will enable Penn’s financial aid program to receive more money directly from endowment funds, a development which “underpins [Penn’s] commitment to its all-grant-no-loan policy,” Gutmann explained.
Because Penn’s endowment drop in FY 2009 was less severe than those of other universities, Gutmann noted, this year’s success is “doubly positive.”
Nonetheless, the University is “still not in the position to have lots of untapped resources,” Gutmann said.
She cautioned that Penn must succeed in its Making History campaign in order to continue this year’s momentum.
Executive Vice President Craig Carnaroli echoed Gutmann’s sentiments. Despite challenges in the second quarter of the fiscal year, Carnaroli lauded Gilbertson and her team for a “very solid performance” amid the volatile financial climate.
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