Editor’s Note: These rankings were based on information from NACUBO that was updated after this story was published. For the updated rankings check NACUBO’s updated 2012 rankings.
More than a year has passed since our last look at our list of the Top 10 Richest Colleges for 2011, so we’ve updated our results for 2012.
When we last checked in, the endowment funds had rebounded from the lean investment years following the Great Recession. Last year was a bit of a retreat as rates of return on investments dipped, with Harvard even falling into negative territory. Some funds ended the year with lower balances because investment returns did not cover expenses.
According to the NACUBO-Commonfund Study of Endowments, which gathers data from 831 U.S. colleges and universities, these institutions’ endowments lost an average of 0.3% (minus fees) for the 2012 fiscal year (July 1, 2011 to June 30, 2012). That’s a sharp drop from the 2011 average gain of 19.2%. The endowments in the NACUBO study suffered disproportionately from their investments in international equities, losing an average of 11.8%, with fixed income, though, softening that blow by gaining an average 6.8%.
What Your Peers Are Reading
All schools on the list have fiscal years that end in June, and they release those results soon after, except Emory, which routinely delays reporting till January. Therefore, the amounts of the endowments are as of June 30, 2012. Here, then, are the Top 10 Richest Colleges for 2012 with the percentage gain or loss in the value of their endowment compared with fiscal 2011.
10. Emory University:
$5.4 billion, up 15%
2011 Ranking, No. 10: $4.7 billion
The Atlanta school’s endowment dipped to $4.7 billion in 2011 (those results were announced too late for our last report), but rebounded with a 15% increase in 2012.
Mary Cahill, vice president of investments and chief investment officer, leads the Emory Investment Management team, using expertise gained at Merck and Xerox among other places.
9. University of Chicago:
$6.57 billion, up 6.8%
2011 Ranking, No. 9: $6.3 billion
Founded by John D. Rockefeller, who wanted to do more than just give money to a college (he had no alma mater), the school saw its endowment grow by 6.8% last year.
The fund is managed by Prakhar Bansai, Elisabeth F. Roth, Andrew James and David Warn. Bansai came from Mornigstar; Roth had worked at BMO Capital Markets and Merrill Lynch; James held several positions for Allstate Insurance, and Warn worked for Morgan Stanley in London. The team maintains a diversified portfolio with the largest segments being in the absolute return and private equity categories.
8. University of Pennsylvania:
$6.8 billion, up 1.6%
2011 Ranking, No. 8: $6.58 billion
Penn, like others, posted a small gain in 2012, coming in at 1.6%.
We noted in our last report that Kristin Gilbertson, who came from form Stanford’s endowment fund and has been Penn’s chief investment officer since 2004, told the school’s newspaper, The Daily Pennsylvania, that the endowment fund has diversified its strategy in recent years, moving away from a heavy reliance on stocks and adding other private equity investments like real estate to the mix.
7. University of Notre Dame:
$7.5 billion, up 3.1%
2011 Ranking, No. 7: $7.3 billion
Notre Dame managed a return of 3.1% on its endowment fund in 2012.
Led by Notre Dame grad Scott Malpass, the fund not only invests well, but follows Catholic precepts when doing so.
“We comply with the bishops’ guidelines on investing, so we have some restrictions based on Catholic social teaching,” Malpass, who worked at Irving Trust Co. on Wall Street before returning to South Bend, is quoted as saying on the university’s website. For example, Notre Dame’s investment managers would not work with companies involved in stem cell research, contraceptives or pornography.
6. Columbia University:
$7.65 billion, up 2.3%
2011 Ranking, No. 6: $7.8 billion