NEWS RELEASE

10/1/03

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 8.8 percent investment return for the 12 months ended June 30, 2003, according to the Stanford Management Company.

In a volatile period for the financial markets ­ the S&P 500 U.S. stock index experienced several large performance swings before finishing flat for this period ­ the MEP's well-diversified mix of assets performed consistently well. The one-year return placed Stanford in the top quartile of major college and university endowments. Over the past 10 years, the MEP has achieved an annualized return of 14.0 percent, growing from $2.4 billion to $8.2 billion.

The MEP is Stanford's primary investment pool for the university's endowment and 75 percent of its expendable funds. Income from the Stanford University endowment now supports 16 percent of the university's $2.3 billion budget.

"Although we are very pleased to be up 8.8 percent for the year ended June 30, 2003, we are perhaps more encouraged by our current three-year performance numbers," said Michael G. McCaffery, chief executive officer of the Stanford Management Company. "In the three years since June of 2000, the Stanford portfolio has shown an annualized performance of +1.3 percent ­ this is over a period in which the U.S. stock market declined more than 10 percent per year. In the year before this extremely difficult market period the MEP was up 38.4 percent. To maintain and even enhance the value of the endowment after a period of such tremendous positive performance is a testament to the broadly diversified nature of our endowment pool."

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