WASHINGTON – Strong investment returns propelled U.S. college and university endowments to a net gain of $71 billion in fiscal 2007,according to the largest annual survey of higher-education endowments.
The number of endowments worth more than $1 billion jumped from 62 to 76,said a study released Thursday by the National Association of College and University Business Officers and TIAA-CREF Asset Management.
That could mean more targets for Sen. Charles Grassley,R-Iowa,who has pressured heavily endowed institutions to increase their spending and ease students' financial burdens.
Harvard and Yale universities,which led a growing list of schools doing just that,retained the top spots on the endowment list with respective values of $34.6 billion and $22.5 billion.
The 785 endowments covered by the study – worth a total $411.2 billion – noted an average rate of return of 17.2 percent for the year ending June 30,6.5 percent higher than the previous year.
“The glass is way more than half-full in the endowment world,” said Brett Hammond,chief investment strategist for TIAA-CREF.
John Walda,president of the business officers association,said the fickle economy favored endowment managers and left many institutions,especially the most wealthy,with more money to aid students or spend in other ways.
“By the same token,that volatility can take us in the other direction very quickly,” which might be the case for 2008,he said.
The study also shows a slowdown in the rush toward alternative investing and a shift toward international investments.
“The last year was a good year to be in international stocks,” said Scott Sudduth,the University of California's assistant vice president and director of federal relations. “As [Monday] and [Tuesday] are proving,however,so far it's a bad year to be in any stocks.”
Sudduth's university system dropped from No. 8 on the endowment list to No. 12,with $6.4 billion. In 2006,the most recent year for which statistics are available,about 22.1 percent of the system's endowment was allocated to international equity or fixed income assets.
Like most other universities,administrators there don't focus too much on large dips or gains and instead watch the economy closely with a long-range perspective,Sudduth said.
“We can't slip too far,” he said,”or we'll be compromising our ability to meet our public service mission.”