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Endowment slips in fiscal 2012

News Editor

Published: Monday, January 14, 2013

Updated: Monday, January 14, 2013 23:01

Brandeis’ roughly $700 million endowment took a negative dip in the last fiscal year, after several years of rebuilding from losses sustained in the 2008 recession. The endowment draw rate also declined slightly.

The return for fiscal 2012 was negative one percent, bringing it down to $675 million from fiscal 2011’s $704 million and 16.8 percent return, according to financial statements and data provided by Chief Investment Officer Nicholas Warren.

This is the endowment’s first negative return since the post-financial crisis figure of negative 17 percent in 2009.

The fund has climbed from its 1998 value of almost $300 million, posting a range of returns as high as 15 percent and as low as negative three percent, until it took a sharp upswing in the two years before the financial crisis hit. In the following year, it lost almost as much as it had gained.

The amount of endowment returns allocated to current University operations also decreased this year. For fiscal 2012 this number was $38.6 million, a draw rate of about 6.2 percent, down from $40.3 million and about 6.4 percent in 2011, according to Marianne Cwalina, senior vice president for finance and chief financial officer.

These funds are mainly allocated to financial aid and faculty chairs, according to financial statements.

A conservative “five percent is the goal for any university right now,” said Cwalina in an interview with the Justice, adding that fiscal 2013’s draw rate would be 5.9 percent.

Brandeis is hardly unique in the performance of its endowment last year.

Tufts University’s endowment declined from roughly $2 billion to $1.9 billion, according to financial statements. Neighboring Bentley University’s dropped from just under $200 million to $193 million.

Boston University took a comparatively slight hit, down only about $4 million from its $1.2 billion endowment.

Several other universities with endowments in the billions, which have historically done well compared to smaller competitors, took slight losses this year, according to a Jan. 7 Pensions & Investments article.

The University of California, Oakland had a negative 1.1 percent return, while the University of Michigan, Ann Arbor had a negative 0.5 percent return. Harvard also took a loss of 0.1 percent on its roughly $30 billion endowment.

Preliminary reports of an annual survey of endowments conducted by the National Association of College and University Business Officers and Communfund shows the average 2012 return to be negative 0.3 percent, according to an Oct. 26 Inside Higher Ed article. The same statistic in 2011 was positive 19.2 percent.

The NACUBO survey includes data provided by 463 United States colleges and universities.

As of Nov. 31, Brandeis’ endowment’s value had rebounded to $707.9 million, according to Warren. 

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