Endowment growth falls short of competitor schools

The University’s endowment growth stalled compared to the double-digit gains of competitor schools last year, according to an analysis of recently released data.

Now at $1.37 billion, the University’s pool of endowed money is already smaller than most of its competitor schools. But it’s also not doing much lately to catch up, as GW’s endowment expanded by 5 percent last year.

At the same time, the endowments at GW’s competitor schools – such as the University of Miami, Southern Methodist, Northwestern, Duke and Georgetown universities – all surged by 11 percent or more.

The University’s endowment underwrites costs like faculty hires and financial aid. It grows each year from a combination of investment returns and new donations.

Executive Vice President and Treasurer Lou Katz said GW was held back by private investments, which make up about 14 percent of the total portfolio.

GW’s investments grew 9 percent last year, slightly below the average of its peer institutions nationwide, according to a recently released survey of about 500 colleges by the National Association of College and University Business Officers.

Colleges with endowments similar to GW’s saw average investment returns of 13 percent, according to the report.

This year’s $70 million gain matched the amount that the University took out of its endowment after GW had to dip into the fund to cover day-to-day spending last year.

Part of what likely helped GW this year was that heavy investments in U.S. stocks “did extremely well last year” with average increases of about 21 percent, said Ken Redd, director of research and policy analysis at NACUBO.

GW’s stocks, which make up about one-quarter of its portfolio, saw gains of about 15 percent, falling short of the national average. Real estate investments make up 46 percent of the portfolio, but gained just $20 million last year.

Redd said alternative investments, like those in real estate, did worse this year “even though over the long term they tend to do well.”

Over the past five years, GW’s endowment gains have fluctuated following the recession. After rebounding for two years in a row, the endowment showed sluggish growth with just 2.5 percent more than the year before.

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