The College’s endowment generated an investment return of 14.4 percent in fiscal year 2015 (FY15), making it the third consecutive year that the endowment has generated double digit returns. On June 30—the end of FY15—the endowment was valued at $1.393 billion.
The mean return for all college and university endowments in FY15 was 1.8 percent according to Cambridge Associates, a firm that tracks endowment returns nationwide. The College’s three-, five-, and ten-year annualized returns are 16.5 percent, 14.7 percent and 10.5 percent respectively. The College’s returns are significantly higher than the mean annualized three-, five-, and ten-year returns for all college and university endowments, which are 9.9 percent, 9.6 percent and 6.6 percent respectively.
The endowment generated an investment return of 19.2 percent in FY14 and 16 percent in FY13. Last year, Bowdoin was recognized as the “Endowment of the Year” by Institutional Investor. The College’s endowment is managed by Senior Vice President for Investments Paula Volent. Since she began managing the endowments in 2000, its value has tripled.
The endowment’s growth is significant because it is the primary resource that allows Bowdoin to offer its students financial aid. Of the total endowment balance, approximately 46 percent is restricted to financial aid spending.
“The most important result of the growth of the endowment is financial aid, period,” said President Clayton Rose. “The trustees and the college and [President Barry Mills] and others have placed a deep premium on having the best financial aid capabilities that we can have.”
According to Rose, about 85 percent of the total budget each year goes to either financial aid or faculty and staff compensation.
“Having a strong endowment means we’re able to hire, retain and provide competitive compensation for all the folks that work here,” he said. “When we start to think about challenges, or difficult times, [because] we have 85 percent focused on financial aid or people, that’s the place we’d have to start thinking about making changes, and that would be deeply unpleasant for everyone.”
Bowdoin’s endowment’s return is one of the best in the country—Bloomberg Business cites it as the best among schools so far this year—a result Rose credits to the work of Volent and her investment team.
“We’re the beneficiaries of quite remarkable investment management, skill and dedication,” Rose said.
Rose is a trustee at one of the largest philanthropic endowments in the country, the Howard Hughes Medical Institute (HHMI), and therefore has a background in this type of work.
“I’ve been around this business for a long time, and I’m deeply involved with a very good investment management team at HHMI, and wthat Paula [Volent] has done is unbelievable,” Rose said.