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Post by longsuffering on Apr 28, 2020 22:55:33 GMT -5
Sorry, you didn’t mention any endowment point of reference in your original post. Do you have Colgate’s long-term debt $$$ number ? $333 million, more than 2x HC's. I can't find a value for the interest expense on Colgate's long term debt: HC's interest expense in 2019 was $6.5M on debt of $160 million. To both, one would add the amount of principal being paid. In 2020, HC will pay off $6.7 million of the debt (assuming no new issuances / refinancing), Colgate will retire $4.1 million of debt. BC"s interest expense in 2019 was $38.9 million, and principal payments for 2020 are $30.5 million. So the average interest rate is a tick above 4%, which isn't bad. But add to that $6.5 million interest the amount the endowment loses this year and the effective interest rate will be much higher for 2020 unless there is a miracle turn around in the investments. I'm not saying a college shouldn't have a prudent amount of long term debt but when you invest instead of paying off debt, it's not risk free. Perhaps the college ranking services should start comparing net endowment (investments minus debt) to measure financial strength more accurately.
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Post by KY Crusader 75 on Apr 28, 2020 23:35:17 GMT -5
The S & P 500, if I'm reading correctly, was 2,970 on June 30, 2019. It's at 2,898 now, down 2&1/2 %. So while the stock market is way down from its high a couple of months ago, it is not that far off where it was at the end of the last fiscal year for HC. I think I am correct in using June 30, but please educate me if I am wrong
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Post by longsuffering on Apr 29, 2020 0:14:23 GMT -5
The S & P 500, if I'm reading correctly, was 2,970 on June 30, 2019. It's at 2,898 now, down 2&1/2 %. So while the stock market is way down from its high a couple of months ago, it is not that far off where it was at the end of the last fiscal year for HC. I think I am correct in using June 30, but please educate me if I am wrong I think the HC endowment can only dream of matching the S&P 500.
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Post by Pakachoag Phreek on Apr 29, 2020 6:23:27 GMT -5
The S & P 500, if I'm reading correctly, was 2,970 on June 30, 2019. It's at 2,898 now, down 2&1/2 %. So while the stock market is way down from its high a couple of months ago, it is not that far off where it was at the end of the last fiscal year for HC. I think I am correct in using June 30, but please educate me if I am wrong The S&P would be appropriate with respect to domestic equities. But only 15 percent of HC"s endowment was clearly marked as being invested in domestic equities. Undoubtedly, the percentage is higher, but how much higher will only be revealed when one secures access to the Index Librorum Prohibitorum, now under Jesuit control.
Otherwise, see: www.holycross.edu/sites/default/files/files/adminfinance/f_833019_19_collegeoftheholycross_fs.pdf
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Post by rickii on May 1, 2020 17:44:06 GMT -5
$333 million, more than 2x HC's. I can't find a value for the interest expense on Colgate's long term debt: HC's interest expense in 2019 was $6.5M on debt of $160 million. To both, one would add the amount of principal being paid. In 2020, HC will pay off $6.7 million of the debt (assuming no new issuances / refinancing), Colgate will retire $4.1 million of debt. BC"s interest expense in 2019 was $38.9 million, and principal payments for 2020 are $30.5 million. So the average interest rate is a tick above 4%, which isn't bad. But add to that $6.5 million interest the amount the endowment loses this year and the effective interest rate will be much higher for 2020 unless there is a miracle turn around in the investments. I'm not saying a college shouldn't have a prudent amount of long term debt but when you invest instead of paying off debt, it's not risk free. Perhaps the college ranking services should start comparing net endowment (investments minus debt) to measure financial strength more accurately. [ BTW, just looked up Colgate’s as of 2019 Endowment....$950 million !!! WOW....when did they get so far ahead of HC ?
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Post by longsuffering on May 1, 2020 18:42:45 GMT -5
My sense from following PP's many and appreciated graphs, tables and ledgers is that Colgate didn't so much as zoom ahead as HC has unfortunately had below average investment results for a while.
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Post by hcgrad94 on May 1, 2020 20:09:30 GMT -5
So the average interest rate is a tick above 4%, which isn't bad. But add to that $6.5 million interest the amount the endowment loses this year and the effective interest rate will be much higher for 2020 unless there is a miracle turn around in the investments. I'm not saying a college shouldn't have a prudent amount of long term debt but when you invest instead of paying off debt, it's not risk free. Perhaps the college ranking services should start comparing net endowment (investments minus debt) to measure financial strength more accurately. [ BTW, just looked up Colgate’s as of 2019 Endowment....$950 million !!! WOW....when did they get so far ahead of HC ? Probably 2 generations ago when they were educating rich Wasps and we weren't. Does that surprise you?
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Post by longsuffering on May 1, 2020 23:29:22 GMT -5
[ BTW, just looked up Colgate’s as of 2019 Endowment....$950 million !!! WOW....when did they get so far ahead of HC ? Probably 2 generations ago when they were educating rich Wasps and we weren't. Does that surprise you? No, but I hope HC alumni can flatten the curve and catch up. They aren't making as many WASPS as they used to due to low birth rates.
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Post by Pakachoag Phreek on May 2, 2020 5:58:35 GMT -5
So the average interest rate is a tick above 4%, which isn't bad. But add to that $6.5 million interest the amount the endowment loses this year and the effective interest rate will be much higher for 2020 unless there is a miracle turn around in the investments. I'm not saying a college shouldn't have a prudent amount of long term debt but when you invest instead of paying off debt, it's not risk free. Perhaps the college ranking services should start comparing net endowment (investments minus debt) to measure financial strength more accurately. BTW, just looked up Colgate’s as of 2019 Endowment....$950 million !!! WOW....when did they get so far ahead of HC ? Between June 2012 and June 2019, The value of Colgate's endowment grew by 35.7%, or about $250 million The value of HC's endowment grew by 33.2%, or about $196 million. IIRC, the endowments were closer before the Great Recession.
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Post by hcgrad94 on May 2, 2020 10:14:48 GMT -5
Colgate got a $1,000,000 endowment gift from the founders son in 1912. The value of the entire endowment at Holy Cross didn't reach 7 figures until the early 1970s. Do the math on how far behind we were. Given that 6 decade-long Head Start and the relative wealth of their alumni and parent population to ours, I actually think it's remarkable that our endowment is even in the same stratosphere as theirs.
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Post by KY Crusader 75 on May 2, 2020 11:02:12 GMT -5
I shouldn’t think that Colgate’s alumni or parents are any wealthier than those at Holy Cross. For many years, I think, Colgate had a larger enrollment than HC. I’ll bet Colgate has more alums than HC does. The endowments may well be in proportion to the alumni bases.
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Post by hcgrad94 on May 2, 2020 11:33:07 GMT -5
Colgate is 55% full pay, 45% on aid, roughly the reverse of us. They have 15% full pay International students (we are about 4%) and 9% of their student body is Pell Grant eligible (ours is 17%). And if you think for a minute who Colgate has been educating over the years and who we have been educating over the years it makes sense. The bulk of our existence Holy Cross has, in general, educated a lot of first-generation college students from Irish and other ethnic backgrounds. In part because the Jesuit ethis, we produce a relatively large number of teachers and folks who work at for-profits profits. Colgate has had a more multi-generational wealth component to their student body, and I would guarantee the number of folks working as teachers and not for profits is significantly lower. Obviously this is somewhat of a generalization and it has shifted slightly in recent years, but put this all together and I think it is a safe statement to make that overtime Colgate has had a more affluent student and parent population.
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Post by Pakachoag Phreek on May 2, 2020 13:24:56 GMT -5
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Post by KY Crusader 75 on May 2, 2020 14:06:33 GMT -5
I remember in my HC days, early in Father Brooks’s transformation of the college, that it was said that Harvard’s crew team had a bigger endowment than HC in total
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Post by hcgrad94 on May 2, 2020 14:54:13 GMT -5
So they were roughly double where we were in 1982. Sounds about right.
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