Annual Report 2006-07
Assets and investments
Of KU Endowment’s total assets, 81.7 percent represent marketable securities. The balance of assets is made up primarily of real estate owned by KU Endowment, loans to KU students and faculty, and outstanding pledges. The value of KU Endowment’s total assets, according to audited financial statements, grew to $1.57 billion in 2007, an increase of 13.8 percent over the previous year.
The value of KU Endowment’s total assets represents the book value of assets plus the unrealized gain or loss on marketable securities. It does not include the unrealized appreciation on real estate or other special holdings. This unrealized appreciation is included in the market value of total assets, which increased 12.5 percent in 2007. The market value of endowed funds grew to $1.24 billion, an 18 percent increase over 2006.
Long-term investments
KU Endowment invests its endowed funds and other long-term funds collectively in its Long-term Investment Program, which includes more than 2,700 funds. The value of these funds makes up 71 percent of KU Endowment’s total assets.
To provide consistent support for the university, KU Endowment’s long-term investments must increase in value over time. In 2007, these investments gained 19.3 percent. Growth is compared with a benchmark of spending plus inflation. Over all periods, the total return of long-term funds has exceeded the benchmark.
Growth of a $100,000 endowed fund
Invested in the Long-term Investment Program (1988-2007)
Given performance levels over time, a $100,000 endowed fund established in June 1988 (when measurement by an independent service provider began) would have grown to $268,587 as of June 2007. During the 19-year period, the fund also would have provided $157,202 in support for KU.
Asset allocation
The Long-term Investment Program is designed to maximize returns and limit volatility. It is diversified both by asset class and within asset classes.
To provide further diversification and to enhance returns, allocations in international equities, inflation protection and alternative investments have been gradually increasing. Alternatives include investment strategies designed to produce consistent returns with less volatility than the overall market.
