Penn State's endowment gaining ground with new contributions

HERSHEY, Pa. -- Six months after receiving its fiscal year-end report, Penn State trustees received word today (March 15) that the University's endowment and similar funds total increased by $98 million through the last six months of calendar year 2012, exceeding its June 30 record level of $1.86 billion.

The total market value of the University's endowment and similar funds reached $1.95 billion as of Dec. 31, 2012.

According to David E. Branigan, executive director of the University's Office of Investment Management, the University's endowment itself was valued at $1.859 billion as of Dec. 31, 2012. Similar funds, consisting of deferred gift assets such as charitable remainder trusts and gift annuities, stood at approximately $94 million, an increase of $4 million since June 30. During the entire calendar year, the endowment and similar funds increased by $194.5 million.

The University endowment's annualized net investment return was 14 percent during calendar year 2012 -- adjusted for the impact of gifts and spending and after external investment management expenses.

"The total endowment's $643.7 million increase over the last five years reflects new gift contributions and reinvested investment earnings, after providing cumulative program support of $326.8 million," said Branigan. "Inflows of new gifts, along with positive investment returns, have resulted in a cumulative 52.9 percent increase in the endowment's value, net of spending, from Dec. 31, 2008, to Dec. 31, 2012."

Branigan also noted that Penn State's well-diversified endowment portfolio -- consisting of public equities, private partnerships, bonds and hedge funds, in addition to inflation-sensitive "real assets" -- continues to be the most appropriate investment approach for long-term growth and sustainable spending.

The Penn State Investment Council, created by the Board of Trustees in response to the University’s increasing asset base and complex investment strategies, provides direct oversight of the endowment and long-term investment program. The council regularly reviews asset allocation, new asset classes, investment strategies and manager performance.

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Last Updated April 25, 2013