The University Record, October 23, 2000

Investments yield 43.6% return

By Jane R. Elgass

The University closed its fiscal year June 30, 2000, with unusually strong investment returns—a 43.6 percent total return on its portfolio for fiscal 2000—according to a report presented to the Regents Oct. 20 by Robert Kasdin, executive vice president and chief financial officer.

“Our return this year is most striking,” Kasdin noted, “and it places the University comfortably in the top quartile of endowment portfolios for the year, based on a survey of 279 endowments by Cambridge Associates. Solid performance in several asset classes combined to create the high aggregate return.

“This is the second year in a row that the University has been a top-quartile performer. The University is now in the top quartile of investment performance for the one-, three- and five-year periods.”

Cambridge Associates is a Boston-based investment adviser that specializes in higher education and other nonprofit institutions across the country.

“The University,” according to L. Erik Lundberg, chief investment officer, “continues to focus carefully on the investment profiles of the Long Term Portfolio in a manner that emphasizes appropriate risk levels while maximizing total return over time.” Lundberg joined the University in October 1999.

As of June 30, the University’s Endowment Fund was valued at $3.5 billion.

The size of the endowment ranked 17th among endowments of higher education institutions and the fourth largest of a public university. “Growth in this fund is a result of the generosity of our alumni, as well as an extremely favorable investment environment,” Kasdin noted. “This clearly signals that the University takes its stewardship responsibility with the highest degree of seriousness and professionalism.”

Among public universities, as of June 30, 1999 (the most recent data available), the endowment of the University of Texas was the largest, followed by the University of California and Texas A&M.

The University also this past year reconstituted its Investment Advisory Committee “to assist the investment staff with strategic investment issues,” Lundberg added. “Each of the nine alumni members of the committee have been asked to serve because of their expertise in some aspect of capital markets.” They are: David D. Alger; Terrence A. Elkes; Beverly Hamilton; J. Ira Harris; Jay C. Hoag; Robert C. Jones; Michael Levitt; Sanford R. Robertson; and Joshua Rosenthal.

“The committee’s advice influences the advice given to the Board of Regents with respect to investment decisions,” Kasdin noted. “The Regents retain authority of the investment of the University’s financial assets.”

For a copy of the Investment Report, contact the Investment Office, (734) 615-4445.