Brown endowment reaches $3.3B, reflects 5.7% return

BROWN UNIVERSITY'S endowment was $3.3 billion at the end of the fiscal year on June 30, reflecting a 5.7 percent return.
BROWN UNIVERSITY'S endowment was $3.3 billion at the end of the fiscal year on June 30, reflecting a 5.7 percent return.

PROVIDENCE – Brown University posted a 5.7 percent gain on endowment investments in the year that ended June 30.

The university, in a press release, said that at the fiscal year end, the endowment, which rose to $3.3 billion, grew to a new peak value, and that $155 million was distributed to Brown, representing $18,000 per student.
The Brown Corporation limits the endowment’s annual distributions to between 4.5 percent and 5.5 percent of the average market value of the endowment over the prior 12 quarters, as a way to protect and grow the endowment to support the university’s mission in perpetuity.
“Strong endowment performance in an environment of continued economic uncertainty allows Brown to sustain its leadership in several important areas,” Barbara Chernow, executive vice president for finance and administration at Brown, said in a statement.
Chernow said the endowment’s distributions are a “critical resource” for the university, representing 16 percent of the operating budget, as well as a “significant source of support” for professorships, more than 60 academic programs and its financial aid commitment.
Earlier this year, the Brown Corporation approved an 8 percent increase in the financial aid budget to $112.5 million for the 2015-16 operating budget.
Brown’s 5.7 percent return exceeded both the preliminary return of its benchmark portfolio of 3.3 percent and Cambridge Associates’ preliminary mean and median returns for colleges and universities with endowments over $1 billion at 4 percent and 3.7 percent, respectively.
The return ranks Brown in the top quartile of this peer group, according to the university.
The Brown University Investment Office has focused on increasing the quality of the endowment’s returns through improved manager selection, a flexible asset allocation model and an emphasis on capital efficiency and risk management while maintaining liquidity to fund obligations. These steps all have been taken over the past three years, the university said.
As a result of these changes, the endowment has grown by almost $1 billion and contributed $438 million to the university with a three-year annualized return of 11.3 percent. The average annual return on the endowment over the last five years as of June 30 was 10.5 percent, and over the last 10 years, 7.5 percent, Brown said.

Other Ivy League endowments for the year that ended June 30 are as follows:

  • Dartmouth College, in Hanover, N.H., reported an 8.3 percent endowment investment return, bringing the size of the fund to $4.7 billion.
  • Harvard University, in Cambridge, Mass., posted a 5.8 percent investment return. The value of the fund rose 3.3 percent to an all-time high of $37.6 billion.
  • Yale University reported an investment return of 11.5 percent. The value of the endowment rose 8.4 percent to $25.6 billion.

Bloomberg News contributed to this report.

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