You Could Say Drew’s Endowment Is Slightly Smaller Than the Ivies
But not its FY13 rate of return.
Thanks to strong fund management, a diversification of investments and a fairly new governance model, Drew’s endowment fund generated a strong rate of return this year—a rate that outpaced yields at other major universities, including Harvard, MIT and Yale.
Based on self-disclosures from Drew and other institutions, Drew’s endowment—estimated at $205 million—led the FY2013 rate of return at 13.3 percent. That exceeded Yale’s endowment fund yield of 12.5 percent, Harvard’s at 11.3 percent and MIT’s at 11.1 percent.
“Our return has compared very favorably to the Ivies,” says Jeff Balog, Drew’s associate treasurer, who cited a number of factors for the fund’s success, including a new governance model for the management of the endowment.
After tuition, Drew’s endowment is the second largest source of revenue for the university. A tax-free non-charity fund set up to provide income for university operating costs, an endowment is made up of contributions from alumni, parents, employees, corporations, foundations and friends of the university.
“The stewardship of endowment assets is of critical importance,” says Balog. “The university decided to address the growing complexities and opportunities in the financial market by moving to a chief investment officer (CIO) model, assigning day-to-day management of the endowment to a group with a proven track record.”
“And it’s paying off,” adds Balog.
After a comprehensive search process and an examination of governance models, Drew implemented the CIO model and selected Hall Capital Partners of New York City to serve in that capacity 18 months ago, says Balog. Hall Capital Partners has been assigned discretionary authority for the management of the endowment and operates within guidelines established by the Drew Board of Trustees Investment Committee and staff.
Investment Committee Chair Bill Landis ’85 says the committee, made up of professionals in the financial industry, works closely with Hall to manage the endowment fund, whose diversified portfolio includes exposure to domestic, global and international stocks, bonds and an array of alternative investments, including hedge funds, private equity and an energy fund.
“Hall helps us react to changing markets and helps us to be more prepared to deal with today’s volatility in the marketplace,” says Landis, founder of Raith Capital Partners of New York City. “The endowment fund is a very important piece of the operating budget of the school. ”—Elizabeth Moore