After dramatically decreasing 17 percent in 2009, Bowdoin's endowment grew by 10.3 percent in fiscal year 2010. Following a decade in which the College's endowment regularly outperformed other school's funds, this rate fell below the 12.2 percent that Cambridge Associates reported as the median return among the educational funds the firm tracks.
During fiscal year (FY) 2010, which ended June 30, Bowdoin's endowment increased from a market value of $688.4 million to $753.5 million. This change reflects draws to support the operating budget as well as money added through the school's fundraising efforts.
Some top schools have announced endowment returns, with Dartmouth, Williams and Penn earning 10 percent, 12 percent and 13 percent, respectively. Bates has yet to release results; a representative of the college said its annual audit was ongoing. Columbia did exceptionally well, growing its endowment by 17 percent; the New York school likely has fewer holdings in alternative assets such as private equity, venture capital and real estate than Bowdoin. Stocks rebounded more quickly last year than alternative assets.
Placing this year's returns in context, Senior Vice President for Investments Paula Volent stressed the College's long-term strategy.
"Long-term returns are more important and each institution has a different asset mix so peer returns are not the best measure, especially over the short run," she said in an e-mail to the Orient.
Senior Vice President for Planning & Development and Secretary of the College Bill Torrey echoed her sentiment.
"We have a very clearly stated investment philosophy—that philosophy is to protect us on the downside and take advantage of the upside," he said. "That means you sometimes don't get the huge returns on the upside, but you are protected. If you look at the Bowdoin portfolio, and you look at the down years, we were not down nearly as far as other places."
According to a release posted last Friday, Bowdoin's long-term annualized returns are "in the top quartile of endowment performance over all multi-year periods." Bowdoin and Williams have achieved similar 10-year annualized returns in the 7 percent range.
The College's endowment is managed by a number of external managers and diversified across a variety of asset classes. One of the managers of Bowdoin's endowment is billionaire Stanley Druckenmiller '75, who recently announced plans to retire from his hedge fund Duquesne Capital Management LLC. According to Bloomberg, Druckenmiller's announcement comes during a year in which Duquesne is down 5 percent—the fund has never had a year in which it lost money.
The percentage of Bowdoin's endowment that Druckenmiller manages is not publically known. Multiple college officials declined to discuss how Druckenmiller's retirement would affect the endowment.
Volent indicated, though, that she is pleased with the endowment's performance. "Our FY 2010 return is great and we are very proud of it," she said.
After receiving her MBA from the Yale School of Management, Volent worked in the Yale University Investments Office under David Swensen, perhaps the most successful endowment manager in higher education. Swensen, by making alternative assets an important part of Yale's strategy, achieved returns unparalleled by other institutions. This year was an unusual one, though—Yale's endowment grew by 8.9 percent in FY 2010, trailing its peers.
Volent did not comment when asked how similar her investment strategy is to Swensen's.
While the endowment's performance was below in the median, alumni giving remained remarkably strong. Unaudited data provided by Torrey shows that Bowdoin alumni were very generous last year.
The annual giving total for FY 2010 was $9,278,627, with an alumni participation rate of 54 percent. Bates raised $4,723,180 with a 44 percent participation rate and Colby's annual giving total was $4,998,751 with a 43 percent participation rate. Williams set the NESCAC high mark, raising $10,173,275 with a participation rate of 60 percent. In comparing the totals, it is worth noting that Bowdoin has a considerably smaller alumni base than Williams.
"If you hit 60 [percent] that is the gold standard," Torrey said. "If you get anywhere above 50 percent, most schools would give their right arms to be above 50" percent, he said.
Over the past four years, the annual giving rate declined slightly from a peak of 59.5 percent in FY 2007, a year that fell in the middle of The Bowdoin Campaign.
Five percent of a school's total score in the U.S. News and World Report college rankings is determined by its average annual giving rate.