Columbia University Investments Post 17% Gain, Beating Market

(September 17, 2010) — Columbia University’s investments has increased 17% as of June 30, surpassing recent gains made by Harvard University as well as the returns of a broad range of institutions for the second consecutive year.

New York-based Columbia’s endowment, valued at about $6.5 billion after gifts and spending, rose an average of 7.9% annually in the past five years, compared with a 4.7% gain at Harvard and a 3.1% increase for institutions tracked by Wilshire Associates. While Columbia does not disclose how it allocates its money among various asset classes, the university reported that its endowment gains generate approximately 13% of the university’s budget.

“Over the past five years Columbia’s investment return had been among the top quartile in its peer group,” the university wrote in a statement. University President Lee Bollinger credited the school’s financial success to a dedicated committee, crediting Vice President for Investments Nirmal Narvekar and Senior Executive Vice President Robert Kasdin. “The committee is made up of extraordinary investors,” Bollinger said.

The good news for Columbia comes as schools are just beginning to release their investment performances, with closely watched Yale and Princeton yet to release their figures. Last week, Harvard University’s endowment reported an 11% increase in return. And Investure, which manages $6.5 billion for six schools and four foundations — including Barnard, Smith, Middlebury, Trinity, Dickinson and the University of Tulsa — posted returns of 15.2 to 17.7%.

The recent gains posted by Columbia and Harvard reflect a turnaround from their respective losses of 16% and 27% the prior year, when universities around the country were hit by the worst financial crisis since the Great Depression. In January of this year, a study by the National Association College and University Business Officers (NACUBO) and the Commonfund Institute that showed the average university endowment loss was 19% in fiscal 2009, with findings based on responses from more than 500 colleges and universities, their supporting foundations, and community colleges.