10. Texas A&M
1. Harvard of course..
10. Texas A&M
1. Harvard of course..
Much. Good work.
Texas and Texas A&M's are SYSTEM-WIDE. So no comparison to those two.
What do you mean by this? Does this mean they are deflated or inflated relative to ours?
Numbers of UT and T A&M are inflated. The two schools actually get less than those numbers because the numbers have to be distributed to other schools in their respective systems.
Do dearborn and flint have separate endowments?
Dearborn has an endowment of about $30.2m, Flint has one that sits just below $70m.
Hm, I did not know that. Thanks for the links.
Any idea what they are separate from each other?
In reality, there are something like 7,600 separate endowments between the various campuses (Ann Arbor and throughout the state) as well as UMHS which are part of the $7.8 billion total. Here's the comprehensive Q&A on the University's endowment fund. That being said, it's well over double what it was a decade ago.
Yes. Flint has a 2011 endowment of 79.1 million and Dearborn has one of 30.2 million. Both of which combined probably doesn't even touch just the interest made off of U of M's endowment, but I'd have imagine those are still nice figures nonetheless for schools of their size and short existence.
Edit: Should probably scroll down and look at the already posted replies before I comment. I apologize for my redundancy.
It depends on how you define "performed better". IIRC, Michigan's didn't lose as much both numerically and proportionately. However, becaue of it's large size, not only does Harvard's endownment hve a greater opportunity for loss, but it also has the ability for greater investment in divergent areas which may have a higher risk/return.
Speaking generally, just about all major endowments took a huge hit during the downturn. The two notable performers during that time to my knowledge were Texas and ND.
You sound pretty knowledgeable about this topic. But IIRC, isn't the idea behind diversifying exactly the opposite of what you just mentioned? I thoght, in general, you can reduce your risk by diversification.
but I believe what he's saying is that if Harvard and Michigan can both afford to put x% of their assets into high risk/high return investments, Harvard is much more likely to hit on more of those, because x% of Harvard's endowment is significantly bigger than x% of Michigan's.
This might be reducing the issue ad absurdum, but my first thought was about spending $100 betting longshots at the track compared to spending $1000 doing the same; you have the opportunity to lose more, but you also have more chances to hit a winner.
Fund management industry uses percentage points rather than absolute amounts for performance comparison. When they say "Harvard got hit hard during the recent financial crisis," that means their loss in percentage points is large, not the absolute amount itself.
I was asking because of Bluesnu's comments on "greater investment in divergent areas which may have a higher risk/return," which sounds counter-intuitive to me. That's the opposite of modern portfolio theories, I believe.
You want your large endowment to always perform and never be downturned.
This isn't the whole story, but it's a pretty good article from the NYT on the state of endowments in the aftermath of 2008/2009.
If memory servces me right, UM protected itself somewhat from the downturn because it had diversified their endowment because the state had been reducing its payment to the University due to budget issues. So while other schools had not really contemplated a market downturn, UM had been forced in a round-about way to identify and maximize alternative revenue streams.
Lost 28% of the total value of their endowment. The current endowment level $32 billion, the pre-crash peak was $38 billion.
Harvard was a pioneer in using alternative investments (real-estate, credit derivitives, etc) to boost the returns of their fund. It bit them, like it did a lot of large finanial entities leveraged to magnify returns, with investments in illiquid assets.
Apparently there was a lot of rebalancing in Harvard (and most endowment portfolios) after the crisis and their investments have bounced back.
I was watching the ND/BC game with my domer friend on Saturday and he was claiming that ND's endowment was #4 in the nation and Michigan's wasn't even in the top 10. I don't know where he got his data from but I just wish he wasn't such a liar.
Personally, my livelihood here in Cambridge is dependent in no small part on the health of the MIT and Harvard endowments. It's good to see they are still roughly equivalent to the GDP of a mid-sized country.
I would hate to defend your friend, but nonetheless, at only one billion below Michigan's, and with 1/5 of the student body, theirs is nonetheless substantial among the top in the nation. Maybe he was referring to a per capita basis.
The Domer is still incorrect to say Michigan isn't in the Top 10.
Endowments themselves are peculiar in that they really only exist to be large sums of money, which brings prestige to the University by virtue of the committments (faculty, facilities, etc.) the University can make due to the size of the endowment. In reality, the endowment isn't used for any of those things but rather is invested in for-profit enterprises (PE Firms, mututal funds, hedge funds, etc.) while not paying taxes on its profits (whole other issue, IMO). The groups that benefit from the endowment are the individuals in charge of the money, which at UM is the Regents (I believe), the investment office at the school and the various private, for-profit, investment firms that invest the money on their behalf. If the school wants to build a building or fund a program, rather than use the endowment, it sells the name to a wealthy donor. See the Ross School of Business. At Harvard they can't build enough to satisy naming demands of alumni and non-alumni alike. The point is, the size of the endowment doesn't really benefit the students, faculty or alumni (except in the instance you happen to be one of the investment professionals investing the endowment or are involved in raising the money) other than the ability to brag about it on a message board (no offense). Though, that brag itself is akin to boasting about the number of core plus office building or bio-tech investments made in the past quarter. PROTIP: If you are thinking about donating to the endowment fund, consider instead a program, club or other specific donation.
This isn't true. The university has many many many endowed chair positions for highly qualified professor which means officially the professor isn't required to bring in money to pay their salary.
This is just one example of how a school's endowment is used directly to benefit the school
Actually, I audit 2 of the schools on this list. He's pretty accurate. An "endowed" chair position can mean a lot of things. The money doesn't go to nothing. its kinda complicated to determine where earnings actually go. At the end of the day, a lot of the money is caught up in alternate investments that each school's investment office likes to tout as beating the market
What do you mean when you write the "professor isn't required to bring in money to pay their salary"? Do you mean the university isn't using tuition to pay that salary? Either way, I'm a bit prone to hyperbole and yes, a university's endowment is in part used for faculty, staff and alumni in ways like you mentioned. My point is that the amount of money spent in those ways is far and away eclipsed by the amount spent on investments. Perhaps more is spent on investment advisors and fund raisers even. I just don't see the educational value of having a university be one of the larger private equity funds in America. I don't have the stats off hand but it wouldn't surprise me if Harvard had a bigger fund than the Carlyle Group. Actually, they're probably investors in the Carlyle Group, so maybe not a good example. To top it all off, they don't pay taxes on their earnings, which makes no sense to me. In fact, i think someone could get elected to Congress in NE running on some endowment fund tax reform platform.
If this is the case, then Michigan should only use investment firms run by/employing UM alums. I would imagine they wouldn't have to compromise their returns too much to do that.
to boost these numbers even further :
My guess is that they'll be targetting $4B.
is they claim to be making on the order of 9% yearly on their investments despite the economy and current interest rates (if I can find the link again, I will provide it). If I could be sure I made 9% yearly, I would retire today.
That is the difference in having a few billion to invest and 20k.
than I am can tell me why this is a terrible idea, but I think I have seen other universities do this; why couldn't the university set itself up as kind of an investment firm then (besides legal reasons), where people could invest their money with the university, get some kind of high fixed return on it, and the university keeps the rest to add to their endowment. If they get about 9% return per year, they could offer somewhere around 3% return on investment, still beat any commercial enterprise, and keep anything above and beyond for their own personal stash. Win-win.
I would really feel weird about doing that because it turns the university into a hedge fund manager. I don't see that as the primary job of the university.
Just put your money into a top ranked mutual fund. What is the major difference?
are donating money to your university, albeit indirectly. Or making them money, at least.
Man, good to see they got the billion dollar check I mailed last month.
Always nice to be well endowed!
Disappointed at the general lack of penis jokes here. I only counted two.