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Post by longsuffering on Oct 11, 2019 20:09:06 GMT -5
There was once, embarrassingly, an “Association of Catholic Ivies” and I recall being invited to a meeting of some kind when I lived in Atlanta (87-93) They say the annual volleyball game between HBCU alums and Catholic Ivy alums in Atlanta is not to be missed.
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Post by Pakachoag Phreek on Oct 12, 2019 10:05:12 GMT -5
From data in the latest issue of the Holy Cross magazine:
Endowment covered about 15 percent of operating expenses in each of the past five years (2015-2019). A static percentage. Enrollment grew by seven percent, and operating expenses increased by about 17.5 percent over this five year period.
"Scholarship" aid has increased by $17 million over the same five year period. "Scholarship" is typically defined as a grant, and would not include loans. The $17 million represents an increase of 35 percent. The Common Data Set may clarify this, once it is published.
The $ value of the endowment has grown by nine percent over the five year period. The S&P average over the five year span from June 2015 to June 2019 increased by approximately 45 percent. If the HC endowment had increased by a percentage similar to the S&P's growth, the endowment value's value would be about $1.050 billion (instead of $785 million). <<< That's an oversimplification, BUT it illustrates the terrible returns that HC is realizing with its investment strategy. An endowment of $1.050 billion would have contributed about $12 million more for the operations of the college. (<<Another oversimplification, but it illustrates the point that the higher the endowment, the more money that is available to pay for things, including wished-for things such as HE membership for the men.)
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Post by sader1970 on Oct 12, 2019 10:37:47 GMT -5
Phreek, do you know who ultimately makes those investment decisions? I would guess the CIO makes the ultimate decision but who, if anyone, does he consult with? Does the BoT have a finance committee, perhaps to guide and/or direct him? Perhaps an "investment committee?"
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Post by Pakachoag Phreek on Oct 12, 2019 13:52:33 GMT -5
Phreek, do you know who ultimately makes those investment decisions? I would guess the CIO makes the ultimate decision but who, if anyone, does he consult with? Does the BoT have a finance committee, perhaps to guide and/or direct him? Perhaps an "investment committee?" I believe the BoT has an investment committee, whose members have backgrounds and experience in finance. I don't think they are stock-pickers, rather they give guidance on allocating the endowment by asset class; e.g., how much for domestic equities, how much for foreign equities. IIRC, about $250 million of the current endowment is totally illiquid, i.e., to shift money out of those assets, HC would need to liquidate its investment, which may be very difficult to do without a major penalty These illiquid assets could be real estate (REITs) hedge funds. If these illiquid assets are producing poor returns, it can be difficult to extricate oneself from these investments.
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Post by KY Crusader 75 on Oct 12, 2019 15:28:44 GMT -5
For the 1,000th time: go with index funds and stop paying managers to lag the market.
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Post by WorcesterGray on Oct 12, 2019 16:14:46 GMT -5
While HC's performance was particularly poor, virtually all the elite university endowments significantly underperformed the S&P500 index in fiscal 2019, and over the last ten years. Very good article on this subject in Barron's today, fwiw.
This is what happens when people who have been told how smart they are their whole lives can't resist trying to demonstrate it in an arena where being "average" has been proven to be better than "smart" over the long term.
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Post by Chu Chu on Oct 12, 2019 16:58:41 GMT -5
For the 1,000th time: go with index funds and stop paying managers to lag the market. Amen!
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Post by Pakachoag Phreek on Oct 12, 2019 18:30:51 GMT -5
Very few of the elite universities have published their audited financial statements for 2018-19 so without those one cannot fully assess net endowment growth. I wrote supra that I was oversimplifying the calculation, in the following way. The S&P growth is based on a static investment portfolio, in that there are no withdrawals and no contributions. MIT 'withdrew' $700M from its endowment in fiscal year 2018 to use in operations. That's $700 million that's not reinvested. Contributions were $177 million. __________________ On a much brighter note, HC outperformed that school in Chestnut Hill in fiscal 2019 with respect to the endowment.
BC's net return on investment was a -$20 million, and the value of the endowment shrank by nearly $100 million. Given Fairfield's worst-in-the-state performance in 2018, I'm beginning to think maybe this is a Jesuit thing.
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Post by sader1970 on Oct 12, 2019 18:53:28 GMT -5
1.Given that CT is a very small state, so what? 2. Yeah, I'm sure it's a Jesuit thing. 3. Should we suggest to TPTB that KY take over the endowment at HC?
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Post by KY Crusader 75 on Oct 12, 2019 19:07:42 GMT -5
1.Given that CT is a very small state, so what? 2. Yeah, I'm sure it's a Jesuit thing. 3. Should we suggest to TPTB that KY take over the endowment at HC? I'll do it pro bono.
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