Drexel University’s Endowment Returns 14.7%

Drexel University’s endowment returned 14.7% for fiscal year 2017 ending June 30, bringing its total asset value to $722 million, and putting it among the top 11% of endowments and foundations based on the Wilshire Trust Universe Comparison Service.

The university’s endowment has returned 8.15% annualized over the past five years, and 8.05% annualized since 1991. The endowment’s investment pool has $460 million in investable pooled assets, $132 million in directly held real estate, and $59 million in annuities and trusts. It also includes the $69 million endowment of the Academy of Natural Sciences of Drexel University, which returned 13.3% and consists of $60 million in pooled assets, and $9 million in annuities and trusts.

The university attributed the strong returns to a restructuring by its board of trustees’ investment committee several years ago, which realigned the endowment’s assets, and created a solid asset allocation policy.

“The investment team has a long-term, thoughtful plan to deploy the assets so that over time, the endowment can give more and more back to the University,” said Helen Bowman, treasurer and COO, according to Drexel’s Office of University Communications. “The groundwork that we laid several years ago, to protect and build the endowment, has begun to kick in.”

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The Dragon Fund, a small equity portfolio managed by undergraduate students in Drexel’s LeBow College of Business, was one of the top-performing investments for the endowment, returning 26.2%. The fund has returned 12.5% annually since its inception in 2007, and has grown to $2 million from $250,000 during that time.

“Regardless of investment performance, the Dragon Fund will always be a winner, at least in my mind,” said endowment CIO Catherine Ulozas. “Not only do we benefit from the fact that the fund has a positive and continuing performance, but students benefit so greatly from the class and the experience of managing a live portfolio.”

Further details of the fund’s performance have yet to be disclosed.

Tags: Drexel University, Endowments, Fiscal 2017

Brazil’s three largest pension funds are joining an arbitration case against Brazil’s Petroleo Brasilerio SA (Petrobas), according to Reuters.

Petrobas said in a securities filing it had been informed that the Previ Caixa de Previdência ($9 billion-$15 billion), Funcef, and Petros Fundação (both between $3 billion and $9 billion) pension funds had joined the case, in which shareholders are demanding reimbursement for corruption scandal-related losses against the state-run oil company. The pensions represent Banco do Brasil, Petrobas, and state-bank Caixa Economica Federal employees, respectively.

The news was reported late Tuesday in the newspaper Valor Ecônomico.

“Petrobras reiterates that legislation does not support this initiative, and the company will defend itself to guarantee its interests and those of its shareholders,” the company said in a statement.

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Although Petrobas noted that the three funds did not specify the amount of their claims, Valor reported that Petros estimated it could win between 4 billion and 7 billion reais ($2.11 billion).

The corruption scandal, known as “Operation Car Wash,” dates back to 2014, where former Brazilian President Dilma Rousseff—who served as the state-owned oil company’s chairman prior to her inauguration in 2011—was traced back to Petrobas and countless money laundering and corruption charges for which it was being investigated. Believed to be the largest corruption scandal in modern history, Operation Car Wash not only forced Rousseff out of her political position along with a slew of Petrobas executives, but also nearly saw current President Michel Temer’s impeachment in October as well when Temer was found to be involved in the scam.

Fifteen other scandal-related companies are under investigation.

During this period, various pension funds, which include Previ Caixa de Previdência, Funcef, and Petros, as well as additional shareowners of Petrobas and other scandal-related companies, accumulated tremendous losses from Operation Car Wash.

The operation has included more than 100 warrants for search and seizure, temporary and preventive detention, and coercive measures. The money-laundering scheme is suspected of moving more than R$30 billion ($9.5 billion).

Tags: Brazil, Operation Car Wash, Pension, Petrobras, Scandal

Brazil’s Three Largest Pensions Join Petrobas Lawsuit