UVa endowment suffers massive loss

The University of Virginia’s multi-billion dollar investments took a nearly $600 million hit in the first quarter of this fiscal year, a new report shows.

The investments — which include the school’s endowment money — had their greatest loss for the quarter in September, losing $385 million, leaving the investments’ value at $4.6 billion.

While it is the largest loss ever for UVa’s investments, the report from the University of Virginia’s Investment Management Co. said the investments have dipped another $600 million since the end of the first quarter, from the end of September to mid-October.

That leaves the total investment pool at around $4 billion.

The loss in the first quarter is rivaled by only two others in the school’s investment history, one of which came when the stock market tanked in 1987. The other came in 1990 when the United States was fighting the Gulf War.

“Extreme volatility of price movements for almost every asset class in the world and a pervasive sense of fear throughout the global financial system have created a daunting investment environment,” Chris Brightman, UVIMCO’s chief executive officer, said in a statement accompanying the latest financial report, issued Thursday.

According to Brightman, if the financial markets continue their current trend, then UVIMCO speculates the university’s investments could stand at $4 billion by the end of 2010.

October’s investment report is expected by the end of November. The next quarterly report is due in January.

University officials could not be reached for comment Friday.

It was two years ago when UVa began soliciting donors as part of a five-year campaign to add $3 billion to its endowment by 2011, and school officials have continued fundraising in spite of turmoil in the world’s financial markets.

The soliciting has paid off, with the university bringing in $147 million since July, when the fiscal year began. September was the slowest month for contributions in the first quarter, with roughly $6.5 million raised.

All told, the endowment has raised roughly $1.8 billion since publicly kicking off the fundraising campaign in fall 2006.

According to the September report — the most recent public numbers — the university’s endowment is valued at $2.9 billion.

Officials who track endowments nationwide said the story is likely the same with most other schools’ finances.

“I think everybody is taking a hit,” Brian Flahaven, director of government relations with Council for Advancement and Support of Education, said.

Flahaven added that most schools invest with an emphasis on long-term returns, as opposed to short-term ones.

UVa is drawing on a donor base of 200,000 graduates and their families, along with friends of the university, UVa officials have said.

The university’s endowment ranked 20th in fiscal 2007 among a list of 76 schools with endowments exceeding $1 billion, according to an annual report by the National Association of College and University Business Officers.

That annual NACUBO report was released in January and shows that UVa’s endowment was $4.3 billion at the end of June 2007.

The only other Virginia school on the list of endowments bigger than $1 billion was the University of Richmond, which ranked No. 44 with $1.6 billion. Harvard University topped the list at $34.5 billion.