Penn State’s long-term investment pool surpasses $3 billion through end of 2013

HERSHEY, Pa. — Through an annual mid-fiscal-year report, Penn State trustees learned March 6 that the total market value of the University's long-term investment pool (LTIP) reached $3.2 billion as of Dec. 31, 2013.

The LTIP net investment return was 14.2 percent during calendar year 2013, adjusted for the impact of gifts and spending, and after external investment management expenses. Penn State’s endowment and similar funds increased by $201.5 million through the last six months of calendar year 2013, exceeding its fiscal-year end record level of $2.03 billion.

According to David E. Branigan, executive director of the University’s Office of Investment Management, the University’s endowment itself was valued at $2.12 billion as of Dec. 31, 2013. Similar funds, consisting of deferred gift assets such as charitable remainder trusts and gift annuities, totaled $110 million while nonendowed funds stood at approximately $1.08 billion, an increase of $76.2 million since June 30. During the 2013 calendar year, endowment and similar funds increased by $277.1 million. A summary of the year-end report can be found at http://news.psu.edu/story/288337/2013/09/20/administration/trustees-hear-year-end-report-endowment-appoint-investment/.

“The LTIP’s performance compares very favorably with benchmark/survey results from Cambridge Associates, NACUBO (National Association of College and University Business Officers) and the Big Ten peer group, particularly for the three-, five- and 10-year periods ended Dec. 31, 2013,” Branigan said. “We are especially pleased with the significant contributions from our Private Equity Program. We feel that our ‘all-weather’ portfolio has served us well, delivering investment returns that comfortably exceed endowment spending, or ‘program support,’ of 4.5 percent in addition to inflation and administrative costs.”

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.

The Office of Investment Management oversees the day-to-day management and administration of University investment funds. The office submits policies and practices, as appropriate, for approval to the Penn State Investment Council and Board of Trustees for achieving the University’s investment and spending objectives.

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Last Updated March 18, 2014