UNIVERSITY PARK, Pa. — Penn State's endowment and similar funds increased by a net $90.7 million in fiscal year 2015, and the total market value reached a record high of $2.38 billion as of June 30, 2015, according to a report to the Board of Trustees Friday (Sept. 18).
The market value of the University’s long-term investment pool (LTIP) stood at $3.74 billion as of June 30, 2015, including $1.25 billion of non-endowed funds, said David E. Branigan, chief executive officer of the University's Office of Investment Management.
Showing a five-year timeline for Penn State's endowment investment program, Branigan noted the long-term growth of the endowment's market value, from $1.71 billion in 2011 to the current $2.38 billion in 2015. Gifts totaling $106 million were added to the endowment during the 2014-15 fiscal year, accounting for a substantial portion of the growth.
The investment performance showed a modest one-year return of 3.1 percent despite highly volatile markets, Branigan said, adding that the five-year return of 11. 5 percent places the LTIP in the top 5 percent of an annual survey of 150 colleges and universities by Cambridge Associates, a consulting firm that provides comprehensive reviews to universities on their investment approaches.
Of particular importance is the relationship of investment performance to endowment spending, Branigan said, noting that the LTIP longer-term performance for 10 years (7.8 percent) and 20 years (8.6 percent) exceeds endowment spending, even after adjusting for inflation.
The Penn State Investment Council, created by the Board of Trustees in response to the University’s increasing asset base and complex investment strategies, provides direct oversight of the endowment and long-term investment program. The council regularly reviews asset allocation, new asset classes, investment strategies and manager performance.
The Office of Investment Management oversees the day-to-day management and administration of University investment funds. The office submits policies and practices, as appropriate, for approval to the Penn State Investment Council and Board of Trustees for achieving the University’s investment and spending objectives.