UVa retains fund ranking

The University of Virginia’s endowment again ranks among the nation’s largest, despite the toll the economy has taken on its investments over the last six months.

In its annual report on endowments, the National Association of College and University Business Officers ranked UVa’s cache at 20th for the fifth consecutive year, at a value of roughly $4.6 billion as of June 30.

The last time UVa’s ranking moved was 2003, when it was 23rd with $1.8 billion.

And while the university’s investments’ values have dropped dramatically since the summer, it is one of 77 schools listed by the association as having endowments valued at more than $1 billion.

The University of Richmond is the only other Virginia school among the 77, with an endowment of $1.7 billion.

Nationally, Harvard University ranked first, at $36.5 billion. However, Harvard officials reported in December that its endowment investments had lost $8 billion since late summer.

Of the 796 institutions participating in the study, there was a 3 percent average decline in endowment returns between July 2007 and June 2008.

However, in a follow-up survey of about half of the colleges and universities participating in the 2008 report, researchers found that between July 1 and Nov. 30, 435 institutions’ investment return rates were down on average an additional 22.5 percent. And for those institutions, that five-month decline amounted to a loss in the neighborhood of $94.5 billion. Percentage-wise it is the largest decline since the association started tracking endowments in 1974, said Kenneth Redd, the group’s director of research and policy analysis.

Of the 26 Virginia schools reporting to the association this year, 18 showed losses in endowment value from 2007 to 2008, with the Virginia Military Institute losing 13 percent.

At UVa, reports on the endowment returns have been bleak since July, with the endowment’s value standing at $3.9 billion as of Nov. 30.

At the same time the university’s Board of Visitors has upped the 4.5 percent in endowment spending between July 2007 and June 2008 to 5 percent beginning last July, a payout of roughly $163 million annually, Carol Wood, a spokeswoman for UVa, said.

The report found that institutions with endowments exceeding $1 billion spent an average of 4.3 percent from their endowments between July 2007 and June 2008.

UVa officials have said their investors are looking long-term and that the endowment will eventually recover its losses, something Brett Hammond, chief investment strategist for TIAA-CREF, the financial services firm that analyzed data for the survey, agrees with. Hammond said that, overall, endowment investments have outperformed the stock market since last summer.

“It just shows you the power of [portfolio] diversification,” Hammond said of institutions that have kept from getting hit too hard by any one asset.

He said he was surprised to see how the economy had comparably affected endowments, big and small, unlike in years past, when the massive ones tended to outperform the relatively minor ones.

“This year things seemed to hurt everybody equally,” he said.