<p>Princeton's endowment grew from 15.8 to 17 billion dollars, an increase of 8 percent. </p>
<p>Bloomberg.com:</a> Bonds</p>
<p>Hallowarts, the eight percent figure seems high to me. Princeton's investment strategies are similar to Yale's and I'm going to bet that the return this year will be similar to Yale's as well, that is, somewhere between four and five percent. Even this would be a triumph in the face of these markets but I believe eight percent is unlikely. The real test will be to see what all of these schools achieve next year. It could be very ugly.</p>
<p>Wasn't Harvard's return last year like 15% or something of that magnitude?</p>
<p>Yeah, you were right PtonGrad. The University's endowment now stands at 16.4 billion, a net growth of 5.6 percent. I assume the "17 billion" was from data unadjusted for University spending.</p>
<p>Endowment</a> returns 5.6 percent - The Daily Princetonian</p>
<p>The endowment return was actually a little better than I had guessed. Here are the returns of some of the larger endowments in the country:</p>
<p>8.6%-----Harvard</p>
<p>6.3%-----Brown
6.2%-----Duke, Stanford</p>
<p>5.6%-----Princeton</p>
<p>4.5%-----Yale</p>
<p>3.2%-----MIT</p>
<p>2.7%-----Cornell</p>
<p>0.5%-----Dartmouth</p>
<p>-3.9%----Penn</p>
<p>(Columbia appears not yet to have reported its returns for this year.)</p>
<p>These returns may look good compared to next years given the current volatility in the stock market and the unstable economy. Also, remember that these returns dont tell you how much the size of each schools endowment has changed. The endowment grows through investment returns and gifts to the university but shrinks by the amount that is spent that year. (Most current income such as tuition is spent the year it is received.) For example, Stanford had a 6.2% return on its investments this year but the size of its endowment is unchanged at 17.2 billion because all of that return plus the total of all 2007-2008 income (including gifts) was spent. Princeton had a smaller return at 5.6% but its endowment increased from 15.8 billion to 16.4 billion. In the case of Penn, the endowment actually shrank. In Penns case it appears that they may have had a negative return on investments combined with spending that equaled or exceeded contributions.</p>
<p>Even the reported size of university endowments is subject to interpretation. I believe all of the schools with large endowments have a majority of their capital in non-marketable investments and the value of those investments is the result of a subjective analysis. Its easy to report the size of marketable investments such as U.S. or foreign stocks but non-liquid investments in real estate, new business ventures and commodities might be much more difficult to assess. One school might give a value to certain real estate investments based on their purchase price while another might mark down those assets based on the current real estate climate.</p>
<p>Since these universities closed their books (mostly at the end of June), all of them have seen sizeable losses in their investments. There is no place to hide when virtually every asset class is declining precipitously. If Princeton is still at 16.4 billion at the end of next June it will probably be a triumph. I would guess that many if not all of the large endowments will have decreased.</p>
<p>Yep it is very hard to see how they would not have taken a hit given the market. If they avoid it, we should find out what they did.</p>
<p>To all you Princeton Tigers, you need to talk your administration into getting a B-school, so you can LEARN HOW TO READ A FINANCIAL STATEMENT. The universities are reporting on a fiscal year ended june 30, BEFORE the crash. WANT TO BET THAT THEY ARE DOWN 40 to 50% since then? Basically, the real big endowments, including Princeton's, are hedge funds and the slightly smaller ones invest in hedge funds. So, like all of the hedge funds, which are unregulated, these colleges not only contributed to the bubble but also hastened and depened the collapse by short selling in an attempt to recoup losses. College endowments are now selling off the most liquid of investments, at the bottom, to pay operating commitments (including their salaries, and to pay capital calls on the illiquid ones. They are also seeking to dump the illiquid investments at huge losses.</p>
<p>Everyone would have been much better off if they had invested conservatively and responsibly and actually used the endowments more instead of hoarding them. But too many of these college bureacrats used the increases in the endowments to justify increasing their salaries and staffs.</p>
<p>^
"Learn how to read a financial statement"</p>
<p>I'm sure we're all capable of doing that just fine, mia. Your post simply states what many have been observing for months. Thank you for clarifying the obvious about the financial situation.</p>
<p>We use hundreds of millions every year, mia. Like, 5% of our endowment. In fact, I think if Princeton used more money than it does right now (we get free movie tickets and bus rides to the movie theater every couple of weeks, almost free Broadway shows, free snacks during the night, free coffee at multiple locations, free food at most events, guest speakers every week, food at "study breaks" every week, renovation of an entire residential college this year, the creation of a new residential college last year, the creation of a new science library - Lewis Library - that kicks every other library's ass, etc. etc.) it'd be wasting money.</p>
<p>The updated endowment figures are starting to come in and they are as bad as had been guessed. Harvard's president is suggesting that their endowment may drop 30% by the end of this fiscal year. I believe that may be optimistic. From what I have heard, were all assets to be fairly valued as of today, Harvard would be down between 30% and 40%. It's difficult to offer an intelligent guess as to where these large university endowments will be by next June. </p>
<p>The</a> Harvard Crimson :: News :: Harvard Endowment Fell 22 Percent in Four Months</p>
<p>Princeton, Yale and Stanford are in nearly the same situation as Harvard. I have heard that in order of magnitude of declines, Harvard has been hit the hardest, Yale has been hit very hard and Princeton has been hit hard. While it may be that Princeton's declines have been the smallest, they are still severe. I've not heard anything about Stanford but given the large share of its endowment in publicly traded stocks (about 40%), its losses probably reflect the declines in the general market indices and approach Harvard's.</p>
<p>Crash</a> Course - Barrons.com</p>
<p>The magnitude of these losses is unprecedented and will affect the resources available to students in the near future. Building projects and renovations will be delayed or cancelled and many planned program expansions will have to be put on hold. The situation may be even worse at some other schools.</p>
<p>True PtonGrad2000: The news of $16 Billion is of May 2008 and the endowment has come down heavy in the last 4 to 5 months. It must be hovering around $12 billion keeping in view of $8 billion losses at Harvard in the last 4 months.</p>
<p>That should give some advantages to applicants applying without any FA.</p>
<p>Based on other bits of information I've gathered, I'm going to guess that Princeton's endowment is actually between $13.5 and $14 billion today but the problem for all of these managers is that valuing the non-liquid assets (especially private equity) is very difficult.</p>
<p>I completely disagree with you in regard to financial aid. All of these schools (Princeton, Harvard, Yale and Stanford) have already made it clear that financial aid is a priority and will not be affected. The endowment losses will definitely not result in any advantages for wealthier applicants. Princeton's application process has been "need blind" for a very long time and over 50% of this year's first year class is currently on financial aid. That percentage is expected to rise next year given the economy and Princeton will continue to reach out to and accept students who cannot afford to pay any part of their college expenses.</p>