The University Record, June 7, 1999

Endowment Fund Report

The University Endowment Fund

The University Endowment Fund is an investment pool for hundreds of endowment funds and funds functioning as endowment. As with a mutual fund; purchases, redemptions and distributions are all calculated based on a participant’s share holdings. The fund is valued at $2.4 billion. It is invested in a highly diversified portfolio of stocks, bonds, private equity, real estate, oil and gas, absolute return investments, and cash instruments.

The Shareholders’ Report

This brief report is to inform University Endowment Fund participants of the market value of their shares and their distributions per share. It also provides information on the investment performance of the fund. The investment results shown represent total return, which includes both ordinary income and capital gains (losses).

Distributions represent a portion of return to participants. Distributions are made at 5 percent (annual rate) of the 12-quarter average share value. The other component of return—reinvested capital gains and, to the extent available, reinvested income—is essential to protecting endowment gifts and endowment distribution against inflation. It is reflected in the value of endowment shares.

For further information about the endowment investment program, contact the Treasurer’s Office, 763-1299.

Investment Managers

Publicly Traded Equities: Alliance Capital Management; Artisan Partners; Benson Associates; Capital.

Growth Management: City of London; Grantham, May, Van Otterloo; Marathon Asset Management; Marvin & Palmer Associates; and Skyline Asset Management.

Fixed Income: Tattersall Advisory Group and STW Fixed Income Management.

Investment Management Consultant: Cambridge Associates.

Shareholders' Report

March 31, 1999

Market value per share

June 30, 1998

$6.1003200

Sept. 30, 1998

5.4840323

Dec. 31, 1998

5.9239310

March 31, 1999

6.1154289

Distribution per share

Sept. 30, 1998

$0.067

Dec. 31, 1998

0.068

March 31, 1999

0.069

June 30, 1999

0.071

Performance as of March 31,1999

1 Quarter

1 Year

3 Years

5 Years

10 Years

Inflation

0.3%

1.9%

2.0%

2.3%

3.0%

Distribution

1.2

4.6

4.5

4.8

5.1

Total Return Goal

1.5

6.5

6.5

7.1

8.1

Actual Return Goal

4.4

3.9

12.9

12.9

11.4

Real Value Added

2.9%

-2.6%

6.4%

5.8%

3.3%