The Syracuse Endowment today

Through the generosity of SU alumni and friends and prudent financial management, The Syracuse Endowment has more than doubled in value within the past 10 years. On June 30, 2008, it was valued at $1,005.4 million.

According to a 2007 endowment study by the National Association of College and University Business Officers (NACUBO), Syracuse University ranked 46th out of 516 independent institutions based on our endowment’s market value as of June 30, 2007. However, based on endowment market value per full-time equivalent student, the study ranked Syracuse only 196th out of 516.

 
The Long-Term Investment Fund

The Syracuse Endowment includes the Long-Term Investment Fund, a pooled investment fund valued at $945.9 million as of June 30, 2008.

The Long-Term Investment Fund includes approximately 1,800 individual endowments that, during the 2007-08 fiscal year, provided more than $49 million in support of Scholarship in Action. Many of these endowments are unrestricted and provide the stable support that enables the University to respond to new challenges and opportunities.

When you create an endowment, you have the satisfaction of knowing that your name, or the name of a friend, family member, or favorite professor will be remembered at Syracuse forever, as the endowment gives for many generations to come.

 
How the Long-Term Investment Fund is managed

The Long Term Investment Fund is managed like a mutual fund. Endowment fund assets are commingled for investment purposes, and are accounted for using unit accounting.

As individual gifts are received, each endowment fund is assigned units based upon the month-end unit value. The annual distribution from each endowment is determined by the number of units in the fund and the unit distribution rate established each year by the Investment and Endowment Committee.

Currently, a gift of $1 million provides approximately $45,000 during the first year to support a donor’s stated purpose.

Investment Performance

During the fiscal year ending June 30, 2008, the Long-Term Investment Fund had a total loss of -6.6 percent (net of investment management fees and spending), compared to a -7.2 percent loss for the policy index.

The Long-Term Investment Fund’s three-year annualized return of 8.9 percent and five-year annualized return of 12.4 percent surpassed their respective policy index returns of  8.6 percent and 10.9 percent.

Asset Allocation

The Long-Term Investment Fund is well diversified across major asset classes, as well as within each asset class by market capitalization and investment style or strategy. The Investment and Endowment Committee establishes asset allocation targets to achieve the goal of maximizing long-term total return within acceptable levels of risk. Total return includes income, interest and dividends, and appreciation of the underlying assets.

The Investment and Endowment Committee reviews the fund’s asset allocation each quarter, and balances the portfolios at least annually to maintain the allocation to each asset class within acceptable tolerance ranges.

Spending Policy

The Investment and Endowment Committee establishes the annual distribution rate per unit, presently calculated as 4.4% of the average market value during the previous three fiscal years.

This distribution rate approximates the average rate reported by all institutions participating in the 2007 NACUBO Endowment Study. For fiscal year 2009, the committee approved a distribution rate of $23.21 per unit.

Investment Manager Selection

Syracuse University utilizes professional investment firms to manage the Long-Term Investment Fund.

The Investment and Endowment Committee is responsible for selecting and terminating investment managers, and uses two investment consultants to assist with manager selection and monitoring. SU continually seeks outstanding investment managers who will enhance the Long-Term Investment Fund’s risk-adjusted return over long-term market cycles.

The University’s publicly traded investments are presently managed by 17 firms; the alternative investments are managed by 55 investment managers. Due to the competitive nature of manager searches, the University does not disclose information about its investment managers.

About the endowment

An endowed fund is established to last in perpetuity, with only the payout from the fund spent each year to support Syracuse University’s goals and priorities. That means that gifts to The Syracuse Endowment give forever, providing the financial foundation on which our future depends.