By Mariah Byrne
Hoya Staff Writer
Article from The Hoya
Published: Thursday, February 2, 2012
Updated: Friday, February 3, 2012 21:02
DATA: 2010-2010 ANNUAL FINANCIAL REPORT; SHAKTI NOCHUR/THE HOYA
After falling below $1 billion during fiscal year 2009, GU’s endowment has grown almost 30 percent over the last two years to reach an all-time high $1.162 billion.
Georgetown's endowment reached a record-high $1.162 billion for the 2011 fiscal year but fell four places from 61 to 63 in the National Association of College and University Business Officers-Commonfund Study's rankings.
The university's endowment grew 15.4 percent to reach the new high, up from a growth rate of 12.8 percent during the 2010 fiscal year, but still below the national average of 19 percent annual growth reported in the study.
Chief Investment Officer Michael Barry attributed the university's drop in the rankings to the defensive positioning of the endowment portfolio, the impact of gifts received by peer institutions and Georgetown's higher-than-average spending rate in the last fiscal year.
Barry added that the relatively small endowment represents a major competitive disadvantage for the university.
"The challenge of being just over $1 billion in size, from an operational standpoint, is that Georgetown must remain competitive with its peer institutions while relying on a smaller pool of supporting capital," he said.
The continued growth of the endowment is primarily the result of returns to university investments in public equity markets, which came in at a rate of 16.8 percent.
Georgetown's investments, comprised of unrestricted gifts, are managed by the university's investment office. The total endowment also includes assets intended for a specific purpose.
Over the course of last year, $66.5 million of the endowment's pooled funds were distributed.
"The purpose of the distribution policy is to strike a balance between current spending and endowment growth," according to the university's 2010-2011 Financial Statement.
The spending of endowment funds was balanced by contributions totaling $59.5 million. Overall, the university received $207 million in contributions and $132.7 million in future commitments last year.
The university's 10-year-long campaign to raise $1.5 billion launched publicly after the end of the 2011 fiscal year and therefore did not have a substantive impact on the most recent endowment rankings. However, because the campaign is soliciting both one-time and rolling gifts, it is intended to have a significant long-term effect.
"There's not going to be an immediate effect that will ramp up the endowment," Barry said of the campaign.
Although the investment office does not offer specific predictions regarding the endowment, Barry is optimistic about the future of the all-important number.
"We're planning … continuing growth," he said. "We're off to an OK start."
Correction: The article previously stated that the university's endowment fell from position 63 to 67. It feel from position 61 to 63.
Article from The Hoya
