1 carleton college endowment faculty presentation
TRANSCRIPT
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MISSION
Carleton’s Endowment plays a critical role in the operation of the College and in supporting its mission of educational excellence.
The Investment Committee is charged bythe Board of Trustees with the responsibilityof directing the investment of the College’s Endowment. Source: Carleton College’s Investment Policy Statement
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INVESTMENT OBJECTIVES
• The Endowment must provide a growing and consistent stream of financial support to the College’s annual budget in perpetuity.
• Given the need for consistent annual budget support, a portfolio of assets should be developed that satisfies the long-term return objective at an appropriate level of risk.
• A portfolio (target exposures and ranges for asset classes) that is expected to meet the above investment objectives will be set by the Investment Committee. This portfolio shall be referred to as the Policy Portfolio. The Policy Portfolio will serve as a guide for the actual allocation of assets.
Source: Carleton College’s Investment Policy Statement
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Performance
Performance for Periods Ending June 30, 2008
-15%
-10%
-5%
0%
5%
10%
15%
Carleton Portfolio -0.7% 9.3% 10.7% 6.2%
S&P 500 Index -13.1% 4.4% 7.6% 2.9%
Policy PortfolioBenchmark*
-3.8% 7.7% 9.5%
1 Year 3 Year 5 Year 10 Year
N/A
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Performance
NACUBO1 Estimates
1National Association of College and University Business Officers. Performance estimated by Hammond Associates based on universe asset allocation.
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Endowment Growth
2008 2007 2006
Beginning Market Value $663,499,967 $571,955,037 $540,039,151
Inflows 16,350,712 2.5% 14,409,884 2.5% 8,097,766 1.5%
Spending withdrawn (29,153,994) -4.4% (27,138,914) -4.7% (25,021,029) -4.6%
Investment return* (2,874,881) -0.4% 104,273,960 18.2% 48,839,149 9.0%
Ending Market Value $647,821,803 -2.4% $663,499,967 16.0% $571,955,037 5.9%* Net of investment management fees, investment office expenses, and consulting fees.
SOURCES OF ENDOWMENT GROWTH LAST THREE FISCAL YEARS
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Asset Allocation
A significant change in asset allocation policy was approved at the March 2007 Investment Committee meeting. Since that time, the College’s endowment portfolio has materially changed.
The asset allocation changes further diversify the portfolio while increasing expected returns.
Private Equity, Real Assets, and Marketable Alternatives (hedge funds) received larger allocations.
It takes time to diversify.
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Asset Allocation
40%
24% 22%31%
18%
10%
17%16%
20%
17%
15%
10%10%
15%
10%
20%
29%31%
18%
20%
15%
14% 16% 8%
20%
5% 8%15%
6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prior Policy Interim Policy Actual 6/30/08NACUBO $500
mm to $1 billion Long-Term Policy
Domestic Equity International Equity Fixed Income Hedge Funds Private Equity Real Assets Cash
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Endowment Growth History
$647,822
$407,317
$570,083
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
$650,000
$700,000
FY 199
6
FY 199
7
FY 199
8
FY 199
9
FY 200
0
FY 200
1
FY 200
2
FY 200
3
FY 200
4
FY 200
5
FY 200
6
FY 200
7
FY 200
8
Actual Endowment Market Value 1996 Endowment Inflated Beg MV + Inflation and Inflows
MV Increase due to inflowsMV Increase due to investment return
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Investment Committee Members
Wally Weitz ‘70, Chair, Wallace Weitz & Co. Public equities expertise
Leslie Kautz ‘80, Principal, Angeles Investment Advisors Asset allocation and governance expertise
Rich Kracum ‘76, Managing Director, Wind Point Partners Private equity expertise
Robert Nelson ‘62, Retired VP Financial Planning & Analysis, GE Governance and strategic planning expertise
Justin Wender ‘91, President, Castle Harlan Private equity and alternatives expertise
Jack Eugster ‘67, Retired Chairman and CEO, Musicland Stores Corporation
Ex-officio member
Robert Oden, President, Carleton College Ex-officio member
John Winter ‘85, Head of European Investment Banking and Debt Capital Markets, Barclays Capital
International advisor
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Investment Office
Jason Matz, CFA, Director of Investments
Andrew Christensen, CFA, Investment Manager
Megan Bosco, Part-Time Investment Analyst
Daniel Singer, Investment Accountant
50 South Sixth Street, Suite 1440Minneapolis, MN 55402(612) 230-3525(612) 230-3522 (fax)
http://apps.carleton.edu/campus/treasurer/endowment/