Endowment managers at Vanderbilt University bested many of their peers in the last six months of 2008, with Vanderbilt’s endowment declining 16.5 percent during a period of severe economic downturn.
As of Dec. 31, 2008, the Vanderbilt endowment stood at $2.9 billion, down from $3.5 billion on June 30, 2008.
This is the first official release of the performance of the Vanderbilt endowment for the first half of the university’s fiscal year, which began July 1, 2008.
These results were significantly better than the 22.9 percent decline in endowment market values reported by 435 respondents to a survey on endowment performance conducted by National Association of College and University Business Officers. The Standard and Poor’s 500 Index dropped about 30 percent from July 1, 2008, to Dec. 31, 2008.
Matthew Wright, vice chancellor for investments at Vanderbilt, attributed the endowment’s performance to a shift in investment strategy beginning in August 2008 when the university began converting significant stock market assets to cash and liquid securities. The shift occurred shortly before some large financial institutions in the United States began to falter in the wake of the subprime loan crisis.
“We were fortunate to defensively position the portfolio prior to the market decline,” Wright said. “We’re poised very well to navigate this environment.”
The endowment funds about 5 percent of the university’s annual operations.
Cost-cutting measures have been adopted by the university as a cautionary measure, with most departments reducing 5 percent or more from their budgets to preserve cash. New construction projects have also been put on hold.
“These challenging circumstances will bring out the best in Vanderbilt,” said Chancellor Nicholas S. Zeppos. “We will continue to be prudent about our finances while staying true to our core missions of patient care, education and research. Matthew Wright and his team have shown impressive foresight in positioning the university to weather this tough economic climate.”
Media Contact: Elizabeth P. Latt (615) 322-NEWS
elizabeth.p.latt@vanderbilt.edu