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News Release

September 14, 2006

Contact:

Carol Jump, Stanford Management Company: (650) 926-0258

Stanford University endowment report issued by Stanford Management Company

The Stanford Merged Endowment Pool (MEP) generated a 19.4 percent investment return for the 12 months ended June 30, 2006, according to the Stanford Management Company. Over this one-year period the U.S. equity market, as measured by the S&P 500 Index, was up 8.6 percent; and the U.S. bond market, as measured by the Lehman Aggregate Bond Index, was down 0.8 percent. Investment returns over the last year were particularly strong in international markets, real estate and energy-related natural resource investments. Over the past 10 years, the MEP has achieved an annualized return of 14.8 percent, growing from $3.6 billion to $15.2 billion.

The MEP is Stanford's primary investment pool for the university's endowment and a large percentage of its expendable funds. Payout from the endowment supported 18 percent of the university's operating budget for the 2005-06 fiscal year.

"We are very pleased to be up 19.4 percent on the one-year," said John Powers, chief executive officer of the Stanford Management Company. "We are also pleased to have recorded our second consecutive year of returns above 19 percent. The performance of the past two years represents a culmination of the efforts of my predecessor, Mike McCaffery, and I would like to thank him and his team for their contributions. Our goal remains to deliver strong returns over the long haul."

"Over the past five years, ended June 2006, the Stanford portfolio achieved an annualized performance of 12.3 percent while over the same period the U.S. stock market gained, on average, 3.0 percent per year. This strong absolute and relative performance over a longer measurement horizon 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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