The University Record, January 17, 2000

Endowment Fund Report

The University Endowment Fund is an investment pool for hundreds of funds and funds functioning as endowment. As with a mutual fund, purchases, redemptions and distributions all are calculated based on a participant’s share holdings. The fund is valued at $2.5 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 distributions against inflation. It is reflected in the value of endowment shares.

For further information about the endowment investment program, call the Investment Office, 615-4445.

Investment Managers

Publicly traded equities: Alliance Capital Management; Artisan Partners; Benson Associates; Capital Growth Management; City of London; Grantham, Mayo, 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.

Market value per share

Dec. 31, 1998$5.9239310
March 31, 19996.1154289
June 30, 19996.3893184
Sept. 30, 19996.4352164

Distribution per share

March 31, 1999$0.069
June 30, 19990.071
Sept. 30, 19990.072
Dec. 31, 19990.073

Performance, June 30, 1999

1 quarter1 year3 years5 years10 years
Inflation (CPI)0.7%2.0%2.0%2.3%3.0%
Distribution1.2%4.7%4.5%4.8%5.0%
Total return goal1.9%6.7%6.5%7.1%8.0%
Actual total return9.2%13.5%15.1%15.5%12.0%
Real value added73%6.8%8.6%8.3%4.0%