SOURCE: Institutional Investor

Institutional Investor

November 05, 2009 01:00 ET

Institutional Investor Report: A College Endowment Is a Terrible Thing to Waste

The November Issue of Institutional Investor Magazine Looks at How Hundreds of Colleges Failed the Test of Reading Financial Markets, Losing Billions in Endowment Dollars

NEW YORK, NY--(Marketwire - November 5, 2009) - Hundreds of American universities and colleges, including all the Ivy League institutions, lost tens of billions in endowment dollars this year, forcing them to make painful staff cuts, kill programs and halt construction projects.

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Harvard, the richest of the U.S. schools, lost $10 billion alone from its once-$36 billion endowment fund. Stanford saw its coffers drop by $3.5 billion, while Princeton lost $3.7 billion. The endowment funds for these schools are run by some of the smartest people in finance, yet they blindly followed a seductive endowment model set up years ago in a very different financial environment.

Institutional Investor magazine spent months analyzing how this meltdown could happen -- visiting campuses, talking to elusive endowment chiefs and sifting through piles of academic reports and failed endowment formulas. The resulting 6,000-word November cover story not only explores how the endowment model could go so wrong, but also details what schools are doing to address the ongoing problem. In addition, the story includes in-depth profiles of schools like the University of Pennsylvania, whose CIO Kristin Gilbertson is featured on the cover of the November issue, that managed to escape the worst of the carnage. A full investigative report, expanding on our November story, appears on the story at the magazine web site:

The lessons learned by endowment chiefs, university presidents, trustees and boards of regents are likely to have a lasting impact on the way that U.S. educational institutions manage their finances: "Liquidity is something we and others had not paid as close attention to as we should have," admits Christopher Brown, CIO of Bucknell University, whose $443 million endowment lost 16.9 percent for the 12 months ended June 30, 2009.

"I don't think in our lifetime we will take liquidity for granted ever, ever again," adds Sandy Urie, CEO and president of Cambridge Associates.

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Now entering its fifth decade, Institutional Investor has consistently distinguished itself among the world's foremost financial publications with ground-breaking journalism and incisive writing that provides "must read" intelligence for a global audience. In addition, throughout the year Institutional Investor offers a host of proprietary research and rankings that serve as respected industry benchmarks, informing and influencing its carefully targeted circulation base throughout the year. For more information visit

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