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Endowment jumps over 17 percent, marking second year of strong growth

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Claudia Wheatley

Investments from Cornell's endowment soared for a second year in a row, university officials announced today.

The total value of the endowment rose 17.2 percent to $5.27 billion in fiscal 2011, which ended June 30. The figures are preliminary, and final numbers will be available in September, according to A.J. Edwards, interim chief investment officer in the Office of University Investments.

The performance marks the second consecutive year of strong growth, following a 12.6 percent increase to $4.4 billion in fiscal 2010. That recovery came after the endowment fell 26 percent in fiscal 2009 in the wake of the 2008 U.S. financial crisis.

Now the endowment is approaching its high-water mark of $5.8 billion at the close of fiscal 2008.

The second straight year of gain is thanks to a well-diversified portfolio and good manager selection, Edwards said. The current asset allocation includes equities -- U.S., international and emerging markets; private equity; hedge funds; natural-resource related investments; real estate; and a small component of traditional fixed income and cash.

The percentage of the endowment invested in hedge funds has remained steady since 2007, Edwards said, although the makeup of the portfolios has changed since then.

The endowment's current asset allocation was approved in June 2010 by the Cornell University Board of Trustees' Investment Committee. The Investment Committee establishes allocation targets for each asset class and ranges around those targets that give the investments office some flexibility, Edwards noted. Like most of its peer institutions, Cornell's investment office does not manage the endowment directly; rather, the investment office is charged with finding top managers for the assets.

"I'm constantly working with the investment committee to look for investment opportunities," Edwards said. "We're always looking ahead."


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