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Post by Pakachoag Phreek on Oct 20, 2020 17:40:48 GMT -5
The endowment's return on investment was essentially $0. As a portion of the endowment is used for operating the college, this distribution resulted in the value of the endowment dropping by about $25 million. This should be a short-term decline, assuming that the to be announced gift adds substantial $ to the endowment in 2020-21.
The college did not operate in the red in 2019-20, though it feared that it might for the first time in over 50 years. Operating revenues exceeded expenses by $3 million.
In 2020, the college appears to have taken a short-term loan of $22.5 million for five years at a variable rate. In 2019, the college issued 30 year taxable bonds valued at $60 million, at 3.43% interest. The college was also sitting on $125 million of cash on June 30.
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Post by princetoncrusader on Oct 21, 2020 13:42:56 GMT -5
Is the actual return disclosed or are you just noting the value of the endowment at 6/30/20 vs. the same date a year ago? I believe Brown posted a stellar return of 11.1% while Cornell was low single digits. Is there an interim CIO at HC or is the treasurer where multiple hats?
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Post by Chu Chu on Oct 21, 2020 17:08:59 GMT -5
This news makes me seriously wonder about the competence of and question the strategy of our financial investment team. My Vanguard Total Stock Market Index Fund is up 9.3% YTD and 21.2% over the last 12 months.
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Post by bison137 on Oct 21, 2020 17:24:43 GMT -5
This news makes me seriously wonder about the competence of and question the strategy of our financial investment team. My Vanguard Total Stock Market Index Fund is up 9.3% YTD and 21.2% over the last 12 months. I think this is apples to oranges. I assume the HC number is for the fiscal year, running 7/1/2019 to 6/30/2020. During that time, the S&P was up about 1.9%. But over the past year ending October 20th, which may be more in line with your Vanguard fund, the S&P is up 16.6%.
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Post by KY Crusader 75 on Oct 21, 2020 17:26:16 GMT -5
My account is +9% in July to sept quarter. I’m guessing the HC performance metric does not yet include that big market uptick
Edit—looks like Bison just beat me to the punch
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Post by Pakachoag Phreek on Oct 22, 2020 6:07:11 GMT -5
Is the actual return disclosed or are you just noting the value of the endowment at 6/30/20 vs. the same date a year ago? I believe Brown posted a stellar return of 11.1% while Cornell was low single digits. Is there an interim CIO at HC or is the treasurer where multiple hats? Value of the endowment on July 1, 2019, and June 30, 2020. On July 1, 2019, the endowment was valued at $786 million. The return on invested funds was $237K. Contributions to the endowment during the year were $4.4 million. $30.4 million was distributed for operating the college. The result was the endowment value on June e30, 2020 was $25.5 million lower than on July 1. In fiscal 2018-19, the college's investment return and contributions exceeded the amount of monies distributed for the operation of the college (albeit by a very small sum.) That said, the college on June 30, 2020 was sitting on a mountain of cash: $126 million. How much of this was reserved for construction costs I know not, but I suspect most of it was. Fiscal 20-21 should see a bump in the endowment, if only for the forthcoming gift to the college. There is speculation as to the identity of the donor, and the amount (other than it exceeds $40 million). Is the gift eight figures, or nine?
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Post by hchoops on Oct 22, 2020 9:04:10 GMT -5
I refuse to answer those questions
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Post by WCHC Sports on Oct 22, 2020 13:37:46 GMT -5
I'm up about 35% in the fund I manage for myself with some small dollars (humble brag), so if a professional at HC can't do even half of that, should we switch jobs?
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Post by KY Crusader 75 on Oct 22, 2020 13:46:29 GMT -5
I'm up about 35% in the fund I manage for myself with some small dollars (humble brag), so if a professional at HC can't do even half of that, should we switch jobs? Are you comparing the same periods?
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Post by sader1970 on Oct 22, 2020 14:27:42 GMT -5
FWIW, it appears they have not yet replaced former Chief Investment Officer, Tim Jarry. Currently listed:
Daniel Ricciardi '06
Interim Chief Investment Officer and Assistant Treasurer
So far, they are sticking with an alum in Daniel as they did wit Tim.
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Post by Pakachoag Phreek on Oct 22, 2020 15:54:55 GMT -5
Several of the other small colleges and universities audited financial statements are now being published. Bowdoin's ROI was 5.1 percent ($90 million); contributions to the endowment were $19 million; distributions were $72,4 million; endowment value grew by $38 million.
Williams ROI was 2.9%. Villanova's ROI was 6.7% (June-May fiscal year).
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Post by longsuffering on Oct 23, 2020 0:10:08 GMT -5
FWIW, it appears they have not yet replaced former Chief Investment Officer, Tim Jarry. Currently listed: Daniel Ricciardi '06 Interim Chief Investment Officer and Assistant Treasurer So far, they are sticking with an alum in Daniel as they did wit Tim. This is a critical area where some small colleges punch above their weight but we seem to get stuck with Mark Belanger types: vacuum cleaner glove but .228 career batting average over 18 years. Having the endowment go backwards for one year when the world got turned upside down by Covid is one thing, but a pattern of regular underperformance compared to other regional highly selective LACs could turn into a death spiral. Why not use the Chesney model for the next CIO hire and choose someone who consistently outperformed his/her peer group on behalf of a school with a smaller endowment.
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Post by newfieguy74 on Oct 23, 2020 7:36:06 GMT -5
The endowment was $726 million on 6/30/14 and was $785 million on 6/30/19. I know that HC, like all colleges, draws money from the endowment each year, but even so this seems like very modest growth. I would have thought that we'd be pushing a billion dollars by now. Caution and prudence are good things in investing, but I wonder if our approach has not been overly timid.
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Post by KY Crusader 75 on Oct 23, 2020 7:56:16 GMT -5
Again I will say--get rid of the managers and put it all in index funds and we will enjoy dramatically better results.
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Post by Pakachoag Phreek on Oct 23, 2020 7:59:06 GMT -5
From the Globe this morning, Harvard reported yesterday that its operating loss for the last fiscal year was $10 million, and that the ROI on the endowment was 7.1 percent.
HC's previous chief investment officer resigned and took a new position with similar responsibilities at a local Catholic high school.
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Post by alum on Oct 23, 2020 8:01:08 GMT -5
Comparing the return the college gets to a personal portfolio invested in growth funds is apples and oranges since the college invests in large part to generate income. (I do realize that many here, given their ages, probably have a fair amount of income stocks and funds.) The only apt comparison is to other college endowments and it has seemed in recent years that our endowment has done below average.
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Post by princetoncrusader on Oct 23, 2020 9:24:14 GMT -5
Columbia reported a 5.5% return on its endowment. I wonder if the issue with HC is manager selection or the asset mix. In any event, the results are quite disappointing.
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Post by lou on Oct 23, 2020 9:43:20 GMT -5
FWIW, it appears they have not yet replaced former Chief Investment Officer, Tim Jarry. Currently listed: Daniel Ricciardi '06 Interim Chief Investment Officer and Assistant Treasurer So far, they are sticking with an alum in Daniel as they did wit Tim. This is a critical area where some small colleges punch above their weight but we seem to get stuck with Mark Belanger types: vacuum cleaner glove but .228 career batting average over 18 years. Having the endowment go backwards for one year when the world got turned upside down by Covid is one thing, but a pattern of regular underperformance compared to other regional highly selective LACs could turn into a death spiral. Why not use the Chesney model for the next CIO hire and choose someone who consistently outperformed his/her peer group on behalf of a school with a smaller endowment. Played against Mark in high school. He was a better basketball player than baseball
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Post by WCHC Sports on Oct 23, 2020 11:23:02 GMT -5
Again I will say--get rid of the managers and put it all in index funds and we will enjoy dramatically better results. Get a better manager and you can beat the index funds.
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Post by WCHC Sports on Oct 23, 2020 11:24:57 GMT -5
Comparing the return the college gets to a personal portfolio invested in growth funds is apples and oranges since the college invests in large part to generate income. (I do realize that many here, given their ages, probably have a fair amount of income stocks and funds.) The only apt comparison is to other college endowments and it has seemed in recent years that our endowment has done below average. Your last sentence is true, and I agree and am not encouraged by HC's accomplishments in recent history. As to the first part of your statement, I only invest to generate income. If it doesn't make money, then it's a bad plan, bad break, or bad luck. I don't invest in say, oil companies because I "like them" or "support" them. I invest to make money.
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Post by alum on Oct 23, 2020 11:50:55 GMT -5
Comparing the return the college gets to a personal portfolio invested in growth funds is apples and oranges since the college invests in large part to generate income. (I do realize that many here, given their ages, probably have a fair amount of income stocks and funds.) The only apt comparison is to other college endowments and it has seemed in recent years that our endowment has done below average. Your last sentence is true, and I agree and am not encouraged by HC's accomplishments in recent history. As to the first part of your statement, I only invest to generate income. If it doesn't make money, then it's a bad plan, bad break, or bad luck. I don't invest in say, oil companies because I "like them" or "support" them. I invest to make money. I wasn't talking about some sort of pinko liberal social investing strategy. I was just making the point that the growth of the size of the endowment is limited to some degree by the investment choices needed to throw off sufficient "income" to fund the college's operations.
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Post by bison137 on Oct 23, 2020 21:43:00 GMT -5
Again I will say--get rid of the managers and put it all in index funds and we will enjoy dramatically better results. Get a better manager and you can beat the index funds. Few can, and the great majority will be beaten by index funds over any long period of time. Some may recall the wager that Warren Buffett offered to make against any and all hedge fund managers, i.e. that an S&P index fund that would outperform a hand-picked portfolio of hedge funds over a 10 year period. Only one investment manager was willing to accept the bet, and his portfolio got crushed by Buffett’s simple index fund. Had other hedge funds also accepted the bet, I am sure most of them would have also lost.
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Post by KY Crusader 75 on Oct 23, 2020 22:52:46 GMT -5
Maybe Will Danoff of Fidelity Contrafund is an exception-I think he has managed that fund for many, many years and has performed well. There are no doubt a few others, but "over any long period of time" is the key phrase. The overwhelming majority of managers just have expenses that are too high to beat passive investing.
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Post by longsuffering on Oct 24, 2020 2:27:18 GMT -5
This is a critical area where some small colleges punch above their weight but we seem to get stuck with Mark Belanger types: vacuum cleaner glove but .228 career batting average over 18 years. Having the endowment go backwards for one year when the world got turned upside down by Covid is one thing, but a pattern of regular underperformance compared to other regional highly selective LACs could turn into a death spiral. Why not use the Chesney model for the next CIO hire and choose someone who consistently outperformed his/her peer group on behalf of a school with a smaller endowment. Played against Mark in high school. He was a better basketball player than baseball Any chance you were a Crusader for eight years...the first four at St. Joseph's High School in Pittsfield playing against Mark at Pittsfield High?
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Post by princetoncrusader on Oct 26, 2020 12:24:35 GMT -5
Princeton's endowment "earned a 5.6% investment gain for the fiscal year ended June 30, 2020." Interesting factoid from the release: "For the class of 2023, 100% of families making up to $180,000 per year qualified for financial aid. Aid extends above that income level, and students from families with incomes above $250,000 may qualify for some aid." That has to make the recruiting process easier for the Tiger coaches.
The university has a $26.6B endowment. HC and our PL brethren have a lot of catching up to do.
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