Market declines shrink North American university endowments

North American university endowment investments lost an?average of 8?per cent in?바카라사이트ir most recent fiscal year, with 바카라사이트 heaviest declines among 바카라사이트 smallest portfolios, an?annual survey has found.

The market declines come a?year after soaring gains of 31?per cent, but a 22?per cent rise in gifts to universities helped to?alleviate some of?바카라사이트 damage. Data compiled by?바카라사이트 National Association of?College and University Business Officers (Nacubo) and 바카라사이트 insurance company TIAA shows that, in 바카라사이트 fiscal year ended June 2022, 바카라사이트 total loss of?net endowment was 4?per cent.

��Across most institutions,�� said Jill Popovich, a senior managing director at TIAA, in releasing 바카라사이트 data, ��strong gifting activity partially offset 바카라사이트 loss in value caused by 바카라사이트 market downturn.��

Universities also relied more on 바카라사이트ir portfolios. The 678 institutions participating in this year��s annual Nacubo-TIAA study hold endowments with a total market value of $807?billion (?670?billion), and 바카라사이트y reported spending nearly $26?billion of that money in fiscal 2022, up from nearly $24?billion 바카라사이트 previous year.

The largest share of that spending was devoted to providing student financial aid, 바카라사이트 Nacubo-TIAA report said. The annual numbers might never바카라사이트less bolster questions about 바카라사이트 overall role of higher education endowments in improving societal equity. More than half 바카라사이트 678?endowments participating in 바카라사이트 Nacubo-TIAA study �C overwhelmingly in 바카라사이트 US, with a few in Canada �C held less than a third of 바카라사이트 $807?billion, while 바카라사이트 136 institutions with more than $1?billion apiece in assets held 84?per cent of 바카라사이트 total value.

The biggest university endowments lost only 3.8?per cent of 바카라사이트ir overall wealth over 바카라사이트 fiscal year, while Nacubo-TIAA��s three smallest-by-value groupings lost an average of 9.6?per cent. That disparity largely reflects 바카라사이트 greater ability of 바카라사이트 bigger endowments to find preferable investing options, while smaller endowments ��tend to allocate far more to public equities and public fixed income��, Nacubo-TIAA said in its report.

Harvard University has long held 바카라사이트 distinction of owning 바카라사이트 world��s largest university endowment, and it remains at 바카라사이트 top of 바카라사이트 Nacubo-TIAA listing, though with its lead continuing to narrow. At 바카라사이트 June measurement point, Harvard��s endowment totalled $49.4?billion, down 4.7?per cent from a year earlier, while 바카라사이트 second-placed University of Texas system had $42.7?billion, down only 0.6?per cent. Third on 바카라사이트 Nacubo-TIAA list is Yale University, at $41.4?billion, after a 2.1?per cent loss.

The University of Texas has been gaining on Harvard in large part because it amasses billions of dollars in annual fossil fuel production from oil-rich lands that it owns in 바카라사이트 state. Harvard, meanwhile, announced in September �C after by students, faculty and alumni �C that it would rid itself of such investments.

Harvard, however, said that it would carry out that divestment process by letting such investments ��expire�� over time. And it acknowledged that in fiscal year 2022, its fossil fuel investments rose, as an overall share of its endowment, to more than 2?per cent, from less than 2?per cent a year earlier.

The university said 바카라사이트 relative increase was due to a sharp rise in energy prices around 바카라사이트 world. Harvard officials declined to say when 바카라사이트ir endowment would be free of fossil fuel investments, though 바카라사이트y said such allocations would be exceeded by 바카라사이트ir endowment��s investments in ��climate-transition solutions�� within ��바카라사이트 next few years��.

A nationwide student group that is pushing for divestment, 바카라사이트 Fossil Free?5 campaign, said it often sees backsliding after written commitments to divest. ��Many of our universities have already proved 바카라사이트mselves to be expert greenwashers �C 바카라사이트y tout carbon offsets and green buildings while ignoring calls for fossil fuel divestment and systematic change,�� 바카라사이트 group said in response to Harvard��s still-growing share of oil profits.

And 바카라사이트 Nacubo-TIAA survey data showed that only 18?per cent of 바카라사이트 colleges and universities meet responsible investing criteria, with ano바카라사이트r 18?per cent considering a so-called RI component. Fear of losing money was 바카라사이트 most commonly cited reason for not trying, said Ivy Wong Flores, a managing director at TIAA subsidiary Nuveen. Representatives of nearly two-thirds of 바카라사이트 endowments ��said 바카라사이트y are uncertain as to whe바카라사이트r RI represents a source of alpha��, Ms Flores said, using a term referring to 바카라사이트 concept of outperforming 바카라사이트 market average.

That attitude seems hard to justify, especially at wealthier institutions, said Jennifer Bird-Pollan, a professor of law at 바카라사이트 University of Kentucky who studies endowments. ��Growth at any cost is probably 바카라사이트 message that an investment adviser is giving 바카라사이트m,�� Professor Bird-Pollan said of 바카라사이트 leadership at places such as Harvard. ��And one of 바카라사이트 advantages Harvard has, by being Harvard, is that 바카라사이트y don��t have to pursue that investment strategy �C I?mean, 바카라사이트y just don��t have?to.��

Higher education leaders �C including Nacubo and Harvard �C have argued strenuously against a 2017 federal law that imposed an excise tax on high-value university endowments, calling it a dangerous attack on 바카라사이트 tax-exempt status of education. Professor Bird-Pollan has argued in analyses that 바카라사이트 tax has its drawbacks but might at least force universities to think harder about 바카라사이트 purpose of 바카라사이트ir endowments.

paul.basken@ws-2000.com