Docsity
Docsity

Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity


Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan


Guidelines and tips
Guidelines and tips

Denison College's Endowment Performance and Investment Guidelines (2019-2020), Study notes of School management&administration

An overview of denison college's endowment, which has grown to over $914 million and has given the institution a significant advantage during the financial strains caused by the pandemic. The investment guidelines, asset allocation, and performance of the long term investment pool (ltip), as well as the impact of the endowment on the college's ability to provide financial aid and exceptional resources to students.

Typology: Study notes

2021/2022

Uploaded on 09/12/2022

anwesha
anwesha 🇺🇸

4.9

(12)

238 documents

1 / 2

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
ENDOWMENT
PERFORMANCE
2019-20 Denison’s endowment, which has grown to more than $914 million
this year, has given the college a distinct advantage over most
other independent liberal arts institutions. This is especially true
when considering the onerous fnancial strains on higher education caused
by the current global pandemic. The cost of providing a safe and healthy
environment for living and learning has increased dramatically. And at
the same time, many families’ ability to pay for their student’s college
education diminished as a result of coronavirus.
Many good schools, especially those highly dependent on tuition dollars,
have found it increasingly difcult to deliver their students and faculty
the support they need. By contrast, with its high endowment per student,
Denison has continued to maintain and increase that support throughout
this challenging period. From research to athletics
Attending college
to the arts and beyond, our college continues to
can make a huge
thrive. Especially notable is Denison’s ability to
diference in a
provide crucial fnancial aid and exceptional
person’s life, but
career resources when they are needed most.
attending a place
Success breeds success, and Denison is currently like Denison can
experiencing unprecedented success in the area do something
of admissions, which is another distinction that extraordinary.
few colleges can claim these days. Ebony ’20
All of these achievements are clearly the direct result of your investment
in Denison’s endowment, and we all are exceedingly grateful.
The Denison endowment consists of approximately 1030 individual
endowed funds, many of which carry donor restrictions. Donor
restricted endowments generally are made so that annual income
earned by the gift can support a specifc activity such as fnancial aid
to students or to support an academic department or professorship in
perpetuity. While some endowments are restricted as to their use, others
are given without restrictions.
The endowment also holds funds designated by the Board of Trustees
to act as endowment, the income on which is used to support University
needs. However, Board designated endowment (or quasi-endowment as
it is sometimes called) is unrestricted as to purpose. The Board may vote
to spend the principal portion of quasi-endowment at any time.
Endowment and quasi-endowment funds are invested together with
University capital reserves and other smaller pools of capital in the
University’s Long Term Investment Pool (LTIP), which is managed by
the Denison Investment Ofce. For investment purposes, individual
endowment funds are treated as one pooled fund, and they own units
(or shares) in the pool, similar to a mutual fund.
pf2

Partial preview of the text

Download Denison College's Endowment Performance and Investment Guidelines (2019-2020) and more Study notes School management&administration in PDF only on Docsity!

ENDOWMENT

PERFORMANCE

D

enison’s endowment, which has grown to more than $914 million this year, has given the college a distinct advantage over most other independent liberal arts institutions. This is especially true when considering the onerous fnancial strains on higher education caused by the current global pandemic. The cost of providing a safe and healthy environment for living and learning has increased dramatically. And at the same time, many families’ ability to pay for their student’s college education diminished as a result of coronavirus. Many good schools, especially those highly dependent on tuition dollars, have found it increasingly difcult to deliver their students and faculty the support they need. By contrast, with its high endowment per student, Denison has continued to maintain and increase that support throughout this challenging period. From research to athletics (^) “ Attending college to the arts and beyond, our college continues to (^) can make a huge thrive. Especially notable is Denison’s ability to (^) diference in a provide crucial fnancial aid and exceptional (^) person’s life, but career resources when they are needed most. (^) attending a place Success breeds success, and Denison is currently like Denison can experiencing unprecedented success in the area do something of admissions, which is another distinction that extraordinary. ” few colleges can claim these days. (^) Ebony ’ All of these achievements are clearly the direct result of your investment in Denison’s endowment, and we all are exceedingly grateful.

T

he Denison endowment consists of approximately 1030 individual endowed funds, many of which carry donor restrictions. Donor restricted endowments generally are made so that annual income earned by the gift can support a specifc activity such as fnancial aid to students or to support an academic department or professorship in perpetuity. While some endowments are restricted as to their use, others are given without restrictions.

The endowment also holds funds designated by the Board of Trustees to act as endowment, the income on which is used to support University needs. However, Board designated endowment (or quasi-endowment as it is sometimes called) is unrestricted as to purpose. The Board may vote to spend the principal portion of quasi-endowment at any time.

Endowment and quasi-endowment funds are invested together with University capital reserves and other smaller pools of capital in the University’s Long Term Investment Pool (LTIP), which is managed by the Denison Investment Ofce. For investment purposes, individual endowment funds are treated as one pooled fund, and they own units (or shares) in the pool, similar to a mutual fund.

A

t June 30, 2020, the Long Term Investment Pool was valued at approximately $914 million. The components of the LTIP are shown in the table below.

INVESTMENT GUIDELINES

Investment Office staff operate under a delegation of authority from the Board of Trustees and the Investment Committee of the Board. The governance structure and the principal investment guidelines are set forth in an Investment Policy Statement (IPS) approved by both the Investment Committee and Board. The IPS sets forth the overall investment objectives and guidelines to be observed in managing the LTIP assets and provides a framework for both the Investment Committee and Investment Office staff within which to operate. The IPS also sets forth the most recently approved Policy Portfolio, which identifies the asset class target weights and target ranges approved by the Board.

ASSET ALLOCATION

A primary objective in the IPS is to maintain a well- diversified portfolio. Investing across multiple asset classes is the key to growing the endowment and managing risks appropriately. The Policy Portfolio supports this by calling for investments to be allocated across major asset classes. Over the long run, the allocation of the portfolio among these asset classes may be the single most important determinant of the fund’s investment performance.

MARKET VALUE OF THE LONG TERM POOL

Endowment 582,420, Board Designated / Quasi Endowment 235,852, Capital Reserve Funds 91,501, Charitable Annuities 2,055, Denison University Research Foundation 2,474,

As of June 30, 2020, the Policy Portfolio refected the following target allocation to the major asset classes: Cash: 2% Fixed Income: 3% Public Equities: 22% Absolute Return: 41% Private Equity: 20% Real Assets: 12%

PORTFOLIO PERFORMANCE

The return on the LTIP as of June 30, 2020, is as follows. These fgures are annualized and represent the net return, after taking into account investment manager fees and expenses. The policy portfolio is a weighting of the individual asset class benchmarks approved by the Board of Trustees as part of the policy portfolio, which is documented in the Investment Policy Statement.

1 year 3 year 5 year 10 year LTIP 4.8 7.8 5.9 8. Policy Benchmark 0.5 5.1 4.9 7. diference 4.3% 2.7% 1.0% 1.7%

SPENDING RULE

The Board of Trustees has established an endowment spending policy that attempts to achieve the proper balance between supporting the University’s present and future needs – i.e., supporting current students and annual operating budgets while preserving the real value of the endowment and its long term purchasing power to support future generations.

The current spending rule provides an annual cash fow to the operating budget. This operating cash fow is determined under a calculation of spend per unit of the LTIP, which is weighted 70% on the infation adjusted level of the prior year’s spending level and 30% on a market value of the endowment at a 5% spend rate.

“ Your generosity allowed me the opportunity for a summer internship that gave me a sense of direction and purpose as I enter my senior year. I have been continually astounded by the support and generosity of the Denison community. My internship experience is another story I get to share when people ask me why the family of Denisonians is so special to me. I am so looking forward to the day where I can support future Denisonians the way you have supported me. Thank you! ” Abby ’