Endowment Grows By $205 Million In Five Years

3-21-97

Hershey, Pa. -- The total market value of Penn State's pooled endowment fund nearly doubled over the past five years, growing from $217.7 million in 1991 to $423 million as of Dec. 31, 1996. A report presented to the University's Board of Trustees today (March 21) by the Treasurer's office credits the growth to new gifts and reinvested earnings.

Endowments provide a source of income that Penn State can depend on to meet some of its most critical academic needs. The annualized investment return of 11.1 percent for the fund over the past five years exceeded the long-term average of about 10 percent and represented a real return, after inflation, of 7.8 percent.

"In furtherance of Penn State's strategic asset allocation goals, we are continuing to broaden diversification by increasing the proportion of the fund deployed internationally," said Gary C. Schultz, senior vice president for finance and business/treasurer. "We are also increasing our investments in 'alternative equities,' such as real estate, venture and private investments, and energy programs-which have increased to 12.5 percent of the endowment from 9.7 percent a year ago."

Penn State's endowment fund is a pooled investment of gifts. The University holds endowed gifts in perpetuity, investing them and spending only a portion of the total return for each endowment's designated purpose. The remaining return is added to the principal to protect it from inflation.

**gwc**

Contact:
Gary W. Cramer (814) 865-9481 (office) gwc104@psu.edu
Christy Rambeau (814) 865-7517 (office) cmr7@psu.edu