<p>lol bearcats back recruiting? 
kudos to the guy who identified you
any interesting stories to tell?</p>
<p>Actually about 1/3 ($2.5 Billion or so) of the UM endowment is for Medical programs only.</p>
<p>[University</a> of Michigan Funding: A Snapshot](<a href=“General Fund Budget Snapshot | U-M Public Affairs”>http://vpcomm.umich.edu/budget/fundingsnapshot/9.html)</p>
<p>Barrons, you are confusing operating budget with endowment. Michigan’s operating budget is the cost of running the university annually and stands at approximately $5.5 billion, of which $2.5 billion is dedicated to the Medical program. That money is raised primarily through state appropriations, tuition, revenues from the hospital etc…only 4%-5% of that amount is covered by the endowment.</p>
<p>Michigan’s endowment is the value of all of its assets and stands at $7.8 billion, of which approximately $1.5 billion belongs to the Medical school. Michigan’s endowment without the Medical school stands at $6.3 billion. Only Harvard, Yale, Stanford, Princeton and MIT have larger endowments than Michigan and only Columbia comes close. No other university has an endowment that comes within $1 billion of Michigan.</p>
<p>[Finances</a>, returns at ?U? grow in 2011 report - The Michigan Daily](<a href=“http://www.michigandaily.com/news/u-endowment-reaches-highest-level-ever]Finances”>Finances, returns at ‘U’ grow in 2011 report)</p>
<p>Daily article on the endowment - nice returns the last couple years. Also, article mentions upgrades at Yost this coming off season.</p>
<p>Hmm how are those nice returns? I don’t get why everyone’s gushing over the returns. Endowments are relative return based in general. Michigan Endowment returned ~24% from 06/30/10-06/30/11. Over the same period, S&P500 returned 28.1%. That means the endowment underperformed the benchmark (most endowments have SP500 as the benchmark). The PM team generated -400 bps alpha… they should get fired.</p>
<p><a href=“http://i56.■■■■■■■.com/vgidnd.jpg[/url]”>http://i56.■■■■■■■.com/vgidnd.jpg</a></p>
![http://i56.■■■■■■■.com/vgidnd.jpg[/url]](http://i56.tinypic.com/vgidnd.jpg%5B/url%5D){kind=link}
<p>I doubt that the S&P 500 is the benchmark for the endowment fund.</p>
<p>Over the same period:
Harvard 21.4%
Yale 22.0%
Princeton - 21.9%
Duke - 24.5%</p>
<p>Fire them all right bearcats?</p>
<p>YES. Hire Me 
You guys are missing the point. It’s pointless to talk about how much a manager returned without mentioning the risk profile/benchmark returns. I don’t understand why anyone is impressed just because the % return number is big. I can go to vegas tomorrow and return 50% over a night or (1.87*10^66% annualized), doesnt mean I am a better manager.</p>
<p>Over the same period:
Harvard 21.4%
Yale 22.0%
Princeton - 21.9%
Duke - 24.5% </p>
<p>Are you basically saying Michigan did not significantly outperform its peers? What’s with all the praises then?</p>
<p>A-go look at that slide again (#9). It states clearly that 24% of the endowment goes to support the health system. (bullet point 3 on their list) No confusion here. But even taking away that they still have over $5 Billion or so. Many schools are behind that level.</p>
<p>bearcats, the S&P 500 has done so hot over time. Michigan’s endowment grew from under $3 billion to almost $8 billion in the last 10 years. The S&P 500 index hit $1,500 in 2001 and now stands at $1,200. That’s a 20% decline in the value of the S&P 500 index vs a 300% increase in the value of the Michigan endowment over the last 10 years. Universities may be more conservative in their approach, but like it or not, universities have to exercise restraint in how they invest their money. Besides, Michigan’s endowment has grown by 40% in the last two years. That is certainly nothing to sneaze at.</p>
<p>lol, if you were to abitrary choose 2 price points (highest price point in 2001 and lowest price point in 2011), I can do the same. From Feb 2009 to April 2011, SP500 returned 85% (or 33% annualized). See what I did there? I just arbitrarily picked 2 data points that favor my argument the most and base my argument on it.</p>
<p>[Image</a> - ■■■■■■■ - Free Image Hosting, Photo Sharing & Video Hosting](<a href=“http://■■■■■■■.com/r/1qh5yg/7]Image”>http://■■■■■■■.com/r/1qh5yg/7)</p>
<p>Taking this further, based on your claim that “Michigan’s endowment has grown by 40% in the last two years.”, Michigan underperformed SP500 by 4500 bps over the roughly the same period.</p>
<p>Also, SP500 never hit 1500 in 2001. The highest SPX Index has ever been in 2001 was 1373 on in february 2001. </p>
<p>“Universities may be more conservative in their approach, but like it or not, universities have to exercise restraint in how they invest their money.”</p>
<p>But that’s EXACTLY the point I am getting at. Without the article providing a benchmark/volatility profile/sharpe ratio, how can people sing praises just from seeing an investment return? That number has no significance without the other pieces.</p>
<p>Also, based on the information from another poster, the endowment fund did roughly the same as its peer group. Not like it would have been a top tier Lipper or 5-star morningstar rated if it were to be rated against peer group.</p>
<p>Bearcats, since 1986, Michigan’s endowment has averaged close to 15% growth annually, and that’s including the market craches of 1987 and 2008. I picked two years at random. You can pick any frame in time. How about 25 years? or 5 years? Regardless of how you look at it, Michigan’s endowment has done as well as, if not better than, most other indeces.</p>
<p>25 years: In 1986, S&P 500 index was $200. Today, it stands at $1,200. That’s a 600% increase in value. In that same period, Michigan’s endowment grew from $250,000,000 to $7,800,000,000. That’s a 3,000% increase in value. Is that even comparable?</p>
<p>10 years: We already did that exercise. S&P lost 20% of its value in the last 10 years, compared to Michigan’s endowment which increased by almost 300%.</p>
<p>5 years: In 2006, S&P index was $1,380, today, it stands at $1,200. That’s a 13% decrease in value. In 2006, Michigan’s endowment stood $6.1 billion, today it stands at $7.8 billion. That’s a 28% increase in value.</p>
<p>Let us face it, with the exception of 1995-1999, Michigan outperformed the S&P by a huge margin, and we all know what the mid-late 90s S&P boom is referred to (bubble gum anybody?!). And although the S&P outperformed (barely) Michigan’s endowment in the last two years, one should not ignore the fact that the S&P lost 37% of its value in 2008, compered to Michigan’s 22%.</p>
<p>It is ok to be proud of Michigan sometimes bearcats.</p>
<p>Bearcats - equal to its peers? Well I suppose if you like to really round everything; fine. Else I see w/Michigan’s 24.3%; that is 14% higher return than Harvard, 10% higher than Yale, and 11% higher than Princeton; while being less than 1% lower than Duke. </p>
<p>On $8B, each 1% is $80MM. </p>
<p>Oh, and Stanford’s was up 19.5% - I suppose that is about the same as 24.3%.</p>
<p>Usually returns are hard to measure with just the totals because money is often being added to the pie through donations, etc. Very hard to tell how that original $1 did over 20 years without lots of data on deposits and money spent out of the funds by the university. I think it’s safe to say just measuring change in totals over time overstates the returns on money in place. And that is real investment return.</p>
<p>barrons - not sure I get you. The 24.3% is the stated investment return.</p>
<p>Money, it’s a gas
Grab that cash with both hands and make a stash
New car, caviar, four star daydream,
Think I’ll buy me a football team</p>
<p>Actually most endowment funds do not make that distinction and only report net change over time. Now if cash out exactly equals cash in it would not matter. That’s rarely true.</p>