<p>These are definitely good news:</p>
<p>Just curious.</p>
<p>From the article it says “From June 30, 2004 to June 30, 2013, contributions and gifts to endowment totaled $799 million.”. </p>
<p>Here is another article saying the 2014 fundraising</p>
<p><a href=“http://news.uchicago.edu/article/2014/10/21/uchicago-annual-fundraising-reaches-record-total-511-million”>http://news.uchicago.edu/article/2014/10/21/uchicago-annual-fundraising-reaches-record-total-511-million</a></p>
<p>Broad support for the University of Chicago’s academic priorities by alumni, parents and friends resulted in a record $511 million in new gifts and pledges in fiscal 2014.</p>
<p>Does it mean that 2014 fundraising alone has achieved more than half what the past decade has? That will be odd. </p>
<p>Or maybe some donation like 90M for cancer research cannot be counted as a part of endowment?</p>
<p>Well, Chicago’s fundraising isn’t exclusively for the endowment; for example, there are things like annual funds, specific gifts to the IOP and the IME, etc. that wouldn’t be counted within the endowment totals. </p>
<p>Still, this is excellent, and while not on par with some of our peers, its certainly a movement in the right direction.</p>
<p>That makes sense.</p>
<p>I have also noticed Chicago’s investment returns have lagged its peers recently. e.g., this year is 12.7% and last was about 6.6% while some peers have posted 20% return this year and 12% last year.</p>
<p>I think it should be due to the investment strategy - high risk vs. low risk. Maybe during bear market Chicago would outperform its peers (less loss). </p>
<p>Yes, it is on the right track.</p>
<p>Well, because Chicago is taking on loads of risk with debt, it’s hedging its bets by playing it safer with the investments. I expect that once interest rates rise, Chicago will stop taking on so much debt and instead pursue a more aggressive investment strategy.</p>
<p>Loads of risk? As far as I’m aware, Chicago’s debt load is relatively small. It’s just larger than most elite universities, so journalists with no understanding of economics are making a big deal about it.</p>
<p>Chicago has just had bad investment officers, in my view. People forget that Chicago’s loss during the '08 financial collapse was larger than most elite universities as well. It’s not a matter of taking on higher or lower risk - Chicago’s investments have simply been underperforming, and this is no recent occurrence.</p>
<p>From various sources I have gathered a few Chicago’s peers endowment investment annual return rate over the past decade and FY 2009.</p>
<p>During the past decade Chicago’s endowment investment annual return is 9.6%.
Yale is 11.0%
Princeton is 10.5%
Harvard is 8.9%</p>
<p>In FY 2009 Chicago’s endowment investment return was -21.5%.
Yale was -24.6%
Princeton was -24%
Harvard was -27.3%</p>
<p>Yale is often considered a standard for endowment while Harvard has not performed too well. I believe Chicago has chosen to be conservative in the recent years (bull market).</p>
<p>Perhaps we should adopt the Swensen Model!</p>
<p><a href=“David F. Swensen - Wikipedia”>David F. Swensen - Wikipedia;
<p>/s (kind-of. It seems like it works part of the time, and I doubt the market is going to collapse again, but it still may expose the University to too much risk.)</p>
<p>If Chicago had had Yale’s 10-year annual return rate its endowment would have been 13.6% bigger - 1B more. I think it is sort of in the line.</p>
<p>phuriku – relative to its peers (or the universities we want to see as its peers), Chicago’s debt load has been enormous for the past few years. Most of the enormous recent building program has been funded with debt, and the capital campaign to retire that debt and build endowment is just getting underway. I don’t think there’s any question that was a deliberate strategy – for several years, especially 2011-2013, real interest rates were close to, and sometimes below, 0%, and there was huge appreciation in stock and real estate markets. Plus, given the university’s history of poor alumni relations and poor fundraising, it seems like a good idea to solidify the university’s higher education It Girl status before really trying to change its fundraising culture.</p>
<p>And, yes: Given that Chicago is more leveraged than its competition, you might expect its investment strategy to be a little more conservative than theirs. I am not certain that’s the case, though.</p>
<p>Record fundraising last year:</p>
<p><a href=“Architect Viñoly’s new GSB designed with eye to detail – Chicago Maroon”>Architect Viñoly’s new GSB designed with eye to detail – Chicago Maroon;
<p>JHS: It was smart to borrow at low ihterest. It was even smarter to go on a building spree when all the construction companies were hurting from the recession and I am sure were willing to give the university a much better deal in all the projects to keep themselves afloat and their suppliers and workers going through the bad times</p>
<p>From the email distribution from president Zimmer today it says:</p>
<p>“The quiet phase of the campaign generated 182,000 gifts totaling more than $2 billion, and these investments have already had a transformative effect on education and research at the University, not only in Hyde Park, but around the world.”</p>
<p>Not clear if it has already been counted into the endowment.</p>
<p>Read the actual campaign news. The recent 511M fund raising is counted toward the 2B.</p>
<p>Only part of it is counted toward endowment. It seems most of the campaign money will be used sooner than later.</p>
<p>So the majority endowment growth will come from investment.</p>
<p>Which makes sense. The University seems to be primarily interested in creating quick growth of facilities and offerings that will lead to later gains (the Innovation Exchange, for one) rather than just piling everything into the endowment. Once the University has expanded, we should start to see more unrestricted cash donations being moved to the endowment.</p>