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News Release

September 15, 2004

Contact:

ANDREÉ MOORE, STANFORD MANAGEMENT COMPANY: (650) 926-0258

Stanford University endowment report issued by Stanford Management Company

The Stanford Merged Endowment Pool (MEP) generated an 18.0 percent investment return for the 12 months ended June 30, 2004, according to the Stanford Management Company.

Investment returns were generally strong across all asset classes and were largely aided by an ongoing recovery in global equity markets. Over the past 10 years, the MEP has achieved an annualized return of 15.1 percent, growing from $2.6 billion to $10.0 billion.

The MEP is Stanford's primary investment pool for the University's endowment and a large percentage of its expendable funds. Income from the Stanford University endowment supported 16 percent of the University's $2.5 billion operating budget for the 03/04 fiscal year. Other non-endowment investment income contributed an additional 3 percent to the budget.

"We are very pleased to be up 18.0 percent on the year and encouraged by the strength in our three-year performance number," said Michael G. McCaffery, chief executive officer of the Stanford Management Company. "In the three years ended June 2004, the Stanford portfolio has shown an annualized performance of 7.8 percent while over the same period the U.S. stock market declined 0.7 percent per year. This strong absolute and relative performance is a testament to the broadly diversified nature of our endowment pool, its capacity to withstand negative market shocks, and the ability of our managers to add alpha."

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