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September 21, 2009
Emory endowment update

By David Payne

Following a tumultuous year for global economic markets, Emory estimates that its endowment declined approximately 21 percent from $5.4 billion to $4.3 billion between July 1, 2008 and June 30, 2009. The overall change in the value of the endowment over any given time period is a product of multiple factors, including: the underlying rate of return on the investment portfolio; the addition of gifts to the endowment; and spending from the endowment.

During this period, Emory’s actively managed funds reported an investment return of minus 19.4 percent, and a minus 18 percent on its endowment overall.

“Markets around the world experienced unprecedented volatility and price depreciation from the massive deleveraging precipitated by the bursting of the credit bubble,” says Mary Cahill, vice president for investments and chief investment officer. “The consequences of the events of the past year will likely be with us for years to come. While we cannot predict what the future holds, we believe we have positioned the portfolio to provide opportunities for the best returns given the market environment and the University’s needs into the future.”

“In a year of uncommon economic turmoil, Emory, like virtually all of higher education but particularly those schools with relatively larger endowments, faced unprecedented challenges given the steep and rapid decline in the economy,” says Mike Mandl, executive vice president, finance and administration. “While our losses compare reasonably well with our peers, they are significant and will impact the way Emory carries out its mission for years into the future.”

Mandl cautioned that even with an uptick in the economy this year or in the next few years, annual spending from Emory’s endowment to support the University’s operating budget will not return to the levels seen in 2009 anytime in the planning horizon.

These unaudited figures reflect changes to Emory’s endowment between July 1, 2008 and June 30, 2009, a period representing the fiscal year for many universities. Emory’s fiscal year ends Aug. 31 and future figures reported for Emory’s fiscal year will differ from the June 30 numbers reported here.

For additional information, visit investment.emory.edu and the Emory and the Economy Web site.