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Barbara Coffman
IU Foundation
coffman@indiana.edu
812-855-1422

Last modified: Friday, January 7, 2005

IU endowment returns exceed national average

BLOOMINGTON, Ind. -- Investment returns on the endowment managed for Indiana University by the Indiana University Foundation were substantially above the national average in fiscal year 2004. The Commonfund Benchmarks Study, conducted by the Commonfund Institute, reported that endowment returns averaged 14.7 percent nationally. The IU endowment returned 20.9 percent.

The study reported on endowment returns at 707 public and private colleges and universities, independent schools and private foundations in support of education.

As was true of other high performers, the endowment managed by the IU Foundation benefited from the excellent performance of equities in the past year.

"I want to credit and thank the Investment Committee of the foundation's board of directors for bringing the endowment through the past few years in such a spectacular way," said Curt Simic, president of the IU Foundation. "Our returns exceeded the national average in 2003 as well, in a more difficult economic environment.

"The asset allocation profile is an important part of our investment success," Simic said. "In particular, the endowment has benefited from the board's past decisions to continue to diversify the portfolio, especially our exposure to international equities and to small- and mid-capitalization stocks."

Reporting institutions expect lower returns in the current fiscal year. The average expected return in fiscal year 2005 is 7.9 percent.

"The foundation and its board make longer-term projections," Simic said. "Our expected return over the next six years is 8.7 percent per year. This is consistent with the expectations of institutions like ours that have endowments of more than $1 billion."

The study also found that only 42 percent of institutions reported that gifts increased from 2003 to 2004. IU was among those; giving for IU increased from $108.1 million in fiscal 2003 to $121.4 million in fiscal 2004.

"The bottom line," Simic said, "is that donors can have confidence that their gifts for IU are being invested wisely by the foundation and its board of directors."

The IU Foundation is a not-for-profit corporation that serves IU's eight campuses by raising funds and providing stewardship and administrative services for donors and for IU.

The Commonfund manages endowments for more than 1,600 colleges and nonprofit organizations. The Commonfund Institute provides educational services and conducts research to serve scholars and practitioners.

Editors: More information about the Commonfund Benchmarks Study is available online at http://www.commonfund.org/Commonfund/Archive/CF Institute/CBS_educ_fdn_press_0105.htm.htm.