24/7 Wall St. 2010 Best And Worst Managed University Endowments: Harvard, Yale, And Duke Worst

The National Association of College and University Business Officers released its analysis of the financial performances of the endowments at 842 institutions which have a combined $306 billion in assets. The report compared figures for the fiscal ending mid-2009 to those for the mid-2008 period. The average endowment lost 18.7% of its value, net of fees, between July 1, 2008 and June 30, 2009.

NACUBO President and Chief Executive Officer, John D. Walda, commented on the drop by saying, “These results illustrate the extreme difficulties colleges and universities faced at the height of the global economic crisis.”

24/7 Wall St. has analyzed the data for all 842 institutions and made comparisons based on 1) absolute dollar gain and loss, 2) percentage gain and loss, 3) greatest percent and absolute dollar gains and losses at the largest endowments (those with over $1 billion under management) with a special focus on those that lost 5% more than the average endowment in the survey or 23.7%, and 4) colleges and universities with endowments of more than $300 million which outperformed the average endowment loss of 18.7% by 5%–that is, those which had percentage losses of 13.7% or less.

Based on this analysis, 24/7 Wall St. picked the 20 worst managed university and college endowments and the 17 best. There were not enough colleges and universities to make a list of the 20 best based on our criteria. 24/7 also picked a “best of class” of endowments of more than $100 million which had absolute percentage gains over the one year period. Only 33 endowments of any size in this group of 842 had positive gains.

Harvard was, by a wide margin, the worst managed endowment based on both percent and absolute dollar loss among the large funds. This is particularly ironic because Harvard promoted the brilliance of the people who ran its fund to both alumni and the press. The University has now been forced to cut some of its essential services and close many buildings during January. Undergraduates are no longer served hot breakfast.

Harvard’s endowment is the largest and has lost the most in absolute dollars. In addition, it has one of largest declines in percentage terms. Duke and Yale each did almost as poorly as Harvard.

The best-managed endowments include Washington State, Pepperdine, the University of South Carolina and the University of Massachusetts.

The 24/7 Wall St. 2010 Best And Worst Managed University Endowments—-The lists:

The 20 Worst Managed Endowments:
1) Harvard, down 30% and $10.9 billion
2) Yale, down 29% and $6.5 billion
3) Duke, down 28% and $1.7 billion
4) Brown, down 27% and $730 million
5) Syracuse, down 33% and $327 million
6) University of Minnesota, down 27% and $312 million
7) Cornell, down 26% and $1.4 billion
8) University of Southern California, down 26% and $918 million
9) California Institute of Technology, down 26% and $483 million
10) Grinnell, down 27% and $396 million
11) Yeshiva, down  27% and $365 million
12) Southern Methodist, down 26% and $370 million
13) Georgia Tech Foundation, down 26% and $329 million
14) Baylor School of Medicine, down 33% and $360 million
15) University of Illinois, down 26% and $296 million
16) Pomona, down 26% and $460 million
17) Carnegie Mellon, down 29% and $313 million
18) University of Delaware, down 25% and $332 million
19) Northwestern, down 25% and $1.8 billion
20) Rockefeller University, down 24% and $491 million

The 17 Best Managed Endowments:
1. Washington State University, down 9% and $59 million
2. Virginia Tech, down 14% and $78 million
3. University of Utah, down 14% or $81 million
4. North  Carolina State U And Foundations, down 15% and $81 million
5. College of William and Mary, down 15% and $85 million
6. Pepperdine, down 4% and $27 million
7. Dalhousie, down 14% and $50 million
8. Georgia Institute of Technology, down 8% and $27 million
9. McGill, down 13% and $118 million
10. University of Missouri, down 14% and $143 million
11. University of Alberta, down 12% and $90 million
12. Berry College, down 14% and $89 million
13. University of California—SF, down 6% and $30 million
14. University of Manitoba, down 13% and $42 million
15. Texas Tech, down 14% and $113 million
16. University of South Carolina and Foundations, down 8% and $34 million
17. University of Massachusetts, down 5% and $19 million

Best of Class Endowments
1. University at Buffalo
2. VMI
3. University of Victoria BC
4. Victory University/Toronto
5. Utah State

Douglas A. McIntyre