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Volume CXXXIII, Number 6 |
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Bowdoin finds itself well-endowed for 2003
NATALIE CRAVEN
STAFF WRITER
Despite its relatively small size, Bowdoin's endowment, specifically its annual investment returns, recently received positive recognition in the world of institutional financial management.
The College ranked third out of endowments in a field of 158 colleges and universities according to a recent report by Cambridge Associates, a firm that follows and evaluates the accomplishments of endowment funds across the nation. Bowdoin also ranked 10th among all endowed institutions in the same report.
"We are trying to balance spending money for programs now as well as keeping a base of endowment support for future generations of students," Vice President of Investments Paula Volent said.
The endowment is currently about $452 million, with $21.25 million devoted to the support of current programs at the College over the past year. It is composed of over 1,400 individual funds, most of which are designated for specific activities or institutional accomplishments.
"Bowdoin's good relative return for the endowment was related to a good asset allocation policy, which is the mix of investment strategies, as well as good manager selection," commented Volent. "We are proud of our relative return but remain focused on finding investment managers to generate good returns going forward."
The school's endowment excelled in a number of categories, including fiscal returns and investment returns.
In 2003, the College's fiscal return was 9.03 percent, significantly higher than the median return of 3.2 percent in the same period for college and university endowments in Cambridge Associates' report. As of June, the 6.0 percent five-year annualized return for Bowdoin's endowment reflected a performance above the average 4.3 percent five-year annualized return.
Additionally, the ten-year annualized return for the College's endowment was 11 percent, also greater than the national average of 9.3 percent determined by Cambridge Associates.
The college endowment produced an investment return of 1.5 percent in the fiscal year 2002, higher than the national average of -5.0 percent investment return in the same period for college and university endowments across the nation.
"These returns send an important message to those who support Bowdoin College because they show donors that the College is serious about and successful in preserving and building its assets for today and the future," said President Barry Mills in a Bowdoin Sun article.
Mills also said, the College is "extremely fortunate to have such an excellent team" to manage the endowment.
"The credit for much of the good relative performance goes to our good investment managers as well as the oversight of the Investment Committee of the Trustees and the work of the Investment Office," Volent stated. These individuals supervise Bowdoin's investments and assess the school's investment strategies.
In order to manage the endowment, "[the College] allocate[s] between five different asset classes: core equity, fixed income, private equity, inflation protection assets, and absolute return strategies," Volent explained. External investment managers control each section of the endowment.
With the current national economic state, institutions such as Bowdoin have needed an extra effort in order to maintain a productive financial situation.
Dividing the endowment portfolio across a range of asset classes has helped the college to maintain a productive endowment capital. Volent stated that attempting to balance the allocation of funds represents "quite a challenge in today's markets."
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