Endowment rises nearly 20 percent in fiscal 2011, marking second year of growth

The final numbers are in: Cornell's long-term investments (LTI) jumped for a second year in a row, according to university officials.

The total value of the LTI rose 19.9 percent to $5.35 billion in fiscal 2011, which ended June 30.

These final numbers are higher than the preliminary figures (17.2 percent and $5.27 billion) reported in June, 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 LTI fell 26 percent in fiscal 2009 in the wake of the 2008 U.S. financial crisis.

Returns for the three- and five-year periods were -0.1 percent and 5.2 percent, respectively.

These strong results were a consequence of strategic and tactical asset allocation decisions made by the Cornell University Board of Trustees' Investment Committee over the last several years, combined with good manager selection, Edwards said. 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 investments office does not manage the endowment directly; rather, the office is charged with finding top managers for the assets.

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 portfolio is well-positioned to take advantage of opportunities that may arise as well as to continue to meet the needs of the university," Edwards said.

 

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