University endowment reaches $1.3 billion

by Chelsea Radler

Media Credit: Gabriel Muller

The University’s endowment grew 12 percent overall throughout the last fiscal year to stand at $1.3 billion.

The growth marks the second consecutive year that the endowment saw growth, despite continued turbulence in international and domestic financial markets.

The $160 million annual boost to the endowment marks the fund’s highest total in University history.

“I am very positive about the investment opportunities today that will foster future endowment growth,” Chief Investment Officer Don Lindsey said said. He attributed the growth to strong global equity markets.

The endowment grew by $135 million, or 13 percent, in the 2010 fiscal year. This marks the highest point the endowment has ever been, despite double-digit losses in the 2009 fiscal year that left it hovering above $1 billion.

The endowment grew by a total of 21 percent from fiscal year 2010 to fiscal year 2011, but GW annually takes about $60 million from the fund to pay for operating expenses.

Earnings generated by the endowment investments provide funding to financial aid, professorships, fellowships, building on campus and libraries, according to the University’s Investment Office. The Board of Trustees is responsible for determining how endowment funds are distributed each year.

The endowment growth follows trends of national recovery from the economic crisis, according to a spring survey by The Chronicle of Philanthropy.

Lindsey is optimistic about the future of domestic and foreign assets, each of which represented half the endowment in 2010.

“While the U.S. economy does face numerous headwinds, there are still great opportunities,” he said.

American companies that sell products in Asia and South America are benefiting from the expanding economies abroad, Lindsey said.

The University increased its holdings of stock in foreign markets after a significant decline in global prices last August.

“[The reduced price] provided a great opportunity to buy the stocks of great companies at much lower prices,” he said.

The endowment’s assets continue to increase in Brazil, an economy Lindsey identified as very promising.

The University, which first acquired stock in publicly traded Brazilian companies in 2007, now holds $65 million in assets there. The country represents the endowment’s largest investment outside the U.S.

“This portfolio has performed considerably better than the U.S. equity market since inception,” Lindsey noted.

This article was updated on Sept. 20, 2011 to reflect the following:
After publication, GW provided additional information about the endowment's growth.

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