Endowment grows 21.6 percent in past year
Despite recent economic troubles in the hedge fund and sub-prime loan markets, the Rice endowment grew 21.6 percent this past fiscal year now clocking in at $4.66 billion, Vice President for Investments and Treasurer Scott Wise (Will Rice ‘71) attributed the growth to the success of its equity investments.
The endowment, the money with which the university was founded, provides funding for faculty chairs, graduate fellowships and undergraduate scholarships.
The endowment also posted positive returns for the first quarter of the fiscal year ending Sept. 30 in spite of the stock market’s negative turn, Wise said.
“The good news is there was not a big negative impact on the endowment from the credit and liquidity difficulties in the markets,” Wise said.
The endowment’s success will be taken into account when formulating this year’s university budget, which the Board of Trustees approves in December.
Although this year’s budget has not yet been finalized, Wise said the growth of the endowment will allow the university to continue its trend of increasing financial aid payouts every year.
“I’m very pleased with the returns,” Wise said. “Any time you can do returns in excess of 20 percent for a year, you have to be happy with it.”
The last time the endowment had returns higher than 20 percent was in 1998, Wise said.
Wise attributed the endowment’s growth to the success of stocks, private equity, real estate and natural resources such as oil and gas. Currently, the investment is divided into 48 percent in stocks, 20 percent in hedge funds, 10 percent in private equity, 8 percent in bonds, 7 percent in real estate and 7 percent in natural resources.
Over the years, the university has been shifting investments from public stock to private partnerships. Wise said these are more difficult to maintain but produce greater returns.
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