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News Release

September 23, 2009


Lisa Lapin, University Communications: (650) 725-8396,

Stanford Management Company announces 2009 results

The Stanford University Merged Pool (MP) experienced a 25.9 percent investment loss for the 12 months ended June 30, 2009, according to the Stanford Management Company (SMC). The MP is Stanford’s primary investment pool and includes most of the university’s endowment and expendable funds, as well as capital reserves from Stanford Hospital and Clinics and Lucile Packard Children’s Hospital.

Over this one-year period, the U.S. equity market, as measured by the S&P 500 Index, was down 26.2 percent, and the U.S. bond market, as measured by the Barclays Aggregate Bond Index, was up 6.1 percent. The largest previous investment loss that the MP experienced was a decline of 6.2 percent in 1974.

Over the past 10 years, the Stanford MP has achieved an annualized return of 8.9 percent, growing from $5.8 billion to $14.5 billion as of June 30, 2009. During the same period, the U.S. equity market, as measured by the S&P 500 Index, declined by an average of 2.2 percent per year, and the U.S. bond market, as measured by the Barclays Aggregate Bond Index, increased 6.0 percent per year.

"The Merged Pool experienced unprecedented losses during the simultaneous sell off in global markets from September through March," said John Powers, president and CEO of SMC. "Since March, the Merged Pool has begun the gradual process of rebuilding assets and improving portfolio liquidity."

Stanford University’s endowment declined in value by 27 percent over the past year to a value of approximately $12.6 billion as of August 31, 2009. The change in endowment value includes investment losses and payout for university operations, and also gifts made to the endowment.

In light of the decline, the university has reduced the payout on individual endowment funds by 10% in the current fiscal year that began September 1, and announced plans for a further 15% reduction in fiscal year 2011. The university’s budgeted endowment payout for the 2010 fiscal year is $829.6 million, equal to 6.6% of the beginning of year endowment value.

The university has largely completed the budget cuts necessitated by the lower endowment payout. These reductions include a university-wide salary freeze, over 400 staff layoffs, elimination of vacant positions, postponement of $1.1 billion in capital projects, program consolidations and other reductions. Financial aid remains a budget challenge, as the payout from endowment supporting financial aid is decreasing at the same rate as other endowment funds. But the university has not made any reductions in student financial aid.

"The university reacted quickly as the magnitude of the investment downturn was recognized last winter," said Randy Livingston, vice president for business affairs and chief financial officer. "We believe we have accomplished the necessary budget reductions without need for further cuts in the coming years, provided that we can resolve the financial aid shortfall and investment markets don’t go into another tailspin."

For detailed information about the Stanford University budget, including specific budget reductions and the 2010 Stanford University Budget Plan, see and


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