September 25, 2013
Stanford Management Company releases 2013 results
The Stanford University Merged Pool (MP) achieved a 12.1 percent investment return for the 12 months that ended June 30, 2013, 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 & Clinics and Lucile Packard Children's Hospital.
Over the past 10 years, the Stanford MP has achieved an annualized return of 10 percent. During the same period, the U.S. equity market, as measured by the S&P 500 Total Return Index, increased by an average of 7.3 percent per year; the U.S. bond market, as measured by the Barclays Aggregate Bond Index, increased 4.5 percent per year.
"During fiscal 2013, U.S. and other developed world equity markets provided strong returns, while emerging market equities and fixed income returns were meager. In this climate we were pleased with the performance of our globally diversified portfolio," said John Powers, CEO of the Stanford Management Company.
Stanford University's endowment rose in value by 9.7 percent over the past year to a value of $18.7 billion as of Aug. 31, 2013, the last day of Stanford's fiscal year. The growth in endowment value results from investment gains and losses, endowment gifts and other funds transferred into the endowment, offset by the annual payout for university operations. The university's endowment payout for fiscal year 2013 was $921 million, equal to 5.4 percent of the beginning-of-year endowment value. Budgeted endowment payout for fiscal year 2014 is $982 million, or 5.3 percent.
"Thanks to the generosity of Stanford's donors and excellent investment returns, the endowment had significant growth last year and now exceeds where we were before the 2008-09 financial downturn," said Randy Livingston, vice president for business affairs and chief financial officer. "Notwithstanding last year's strong results, we remain concerned about federal budget gridlock, its impact on investment markets and reductions in federal research funding."
For detailed information about the Stanford University budget, including the 2013/14 Stanford University Budget Plan, see http://www.stanford.edu/dept/pres-provost/budget/plans/index.html and http://bondholder-information.stanford.edu.