Brandeis received a record-breaking 18.3 percent return on its endowment for the 2007 fiscal year ending last June, but has since received a much lower return in line with a national trend affecting all colleges, according to Executive Vice President and Chief Operating Officer Peter French.Chief Investment Officer and Vice President for Investment Management Deborah Kuenstner said Brandeis' return is 1.2 percent higher than the national average of 17.2 percent that was reported in the Chronicle of Higher Education Jan. 24.

Kuenster said that Brandeis has a lot of alternative investments that can't be measured in real time, making it difficult to determine the actual return for the current fiscal year. She said there are estimates from Jan. 31, but for some investments the schools is still operating on Sept. 30 numbers.

"We can only speak with high confidence on June 30, because that's when we audit results for the fiscal year end book closing; we spend a lot of time bringing everything up to date when we close the fiscal year," Kuenstner said. However, she said that "We did pretty well through the end of December, but we gave a lot of it back in January and February."

According to Kuenstner, Brandeis makes investments for the long run, looking ahead three to five years, and will weather any economic downturn that occurs during that time.

"We are currently putting together the fiscal '09 budget and the performance of the endowment and our draw out of the endowment is very important," said French. "Our goal is to spend around 5 percent on a three-year average out of the endowment, and we're evaluating right now different scenarios in terms of what the impact of a down market will have on fiscal '09." He said that the spending encompasses practically all expenditures. French firmly stated that a struggling market would in no way affect the University's financial aid budget.

French also said that reduced endowment growth will not affect construction on campus, which is mainly funded through loans, although the nation's subprime mortgage crisis is raising the interest rates on Brandeis' loans.

"When you look at a 10-year history of Brandeis, we've had a market return, on average, of about 9.5 percent, and we have, on average, taken 5.7 percent out of the endowment," said French. The higher education price index averaged about 4 percent over those 10 years, [so you cannot take out more than you are earning,] adjusted for inflation if the endowment is to continue growing, he said.

French said that over that decade, there were good and bad years, and sometimes Brandeis earned a negative return, but everything balances out. This year is just another year in the cycle, he said.

According to the article in the Chronicle, the most successful endowments are the ones that are the most diversified, with international investments bringing in the largest return. Brandeis has always had a diversified endowment, invested in part overseas, said Kuenstner.

If we have multiple years of downturn, as was the case in the early 1990s, Brandeis is forced to "tighten its belt," said French, but for now, Brandeis should be able to weather a single down year.