Boston College's Endowment Returns 13.4% | Chief Investment Officer

Boston College’s $2.4 billion endowment returned 13.4% in fiscal year 2017, with investment gains of $281 million, as the university’s investments swung from a loss of 4.3%, or $97 million last year.

“The endowment return is a reflection of the strong leadership of BC’s chief investment officer John Zona and the investment committee of the board of trustees,” university spokesman said, reported The Heights, Boston College’s student newspaper.

Dunn did not provide details on which assets classes and investment areas contributed most to the relatively strong gains, as the university does not publicly comment on its investment strategy.

According to Boston College’s 2016 annual report, the endowment portfolio is 49% invested in domestic and international equities, 10% invested in fixed-income securities, and 41% invested in alternative strategies, such as return funds, private equity funds, and real asset funds.

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The long-term performance objective of the endowment portfolio is to attain an average annual total return that exceeds the university’s spending rate, plus inflation within acceptable levels of risk over a full market cycle, according to an independent auditor’s report conducted by PricewaterhouseCoopers. The university said it relies on a total return strategy in which investment returns are achieved through both capital appreciation and current yield to reach its long-term rate of return objectives.

According to a report from Bloomberg News in August citing a tax filing, Boston College has a performance-based compensation plan for its investment office that was established in 2015. CIO John Zona received compensation of more than $1 million in 2015, which included a $550,000 salary, a $266,200 bonus, and $242,700 in deferred compensation, according to the filing. That was twice Zona’s pay package in 2014, when he received $535,708 in salary and other compensation, but no bonus.

Tags: Boston College, Endowments, Fiscal Year

The University of Missouri’s $1.5 billion endowment returned 13.7% net of fees for the fiscal year ended June 30, the university reported in its most recent quarterly performance report.

The university reported that the endowment’s three-year, five-year, seven-year, and 10-year returns were 5.0%, 8.7%, 9.0%, and 4.8%, respectively.

For fiscal year 2017, the university reported investment and endowment income, net of fees, of $285.2 million, compared to $22.2 million for fiscal year 2016, which translates to a jump of nearly 1,200%.

The University said it is nearing the end of a transitional period in which the spending distribution rate has been lowered to 4.5% from 5.0%. “This decrease reflects diminished capital market return expectations over the medium term,” said the university in its report, “and is consistent with our mandate to maintain the purchasing power of each endowment account.”

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The endowment pool goal is to invest for long-term growth, with broadly diversified investments to reduce risk. It uses a total return approach, with an emphasis on growth assets.

The fund sets asset allocation targets of 43% for global equity, and 10% each for private equity, risk parity, and real estate/infrastructure, respectively. The remaining 27% of the fund aims for allocations of 7% in opportunistic debt, 6% in hedge funds, 5% in emerging markets debt, 4% in global fixed income, 3% in inflation-linked bonds, and 2% in commodities.

Tags: Endowments, Fiscal Year, University of Missouri

Boston College’s Endowment Returns 13.4%

University of Missouri Endowment Returns 13.7%