September 27, 2012
Stanford Management Company releases 2012 results
The Stanford University Merged Pool (MP) achieved a 1.0 percent investment return for the 12 months that ended June 30, 2012, according to the Stanford Management Company. 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 the past 10 years, the Stanford MP has achieved an annualized return of 9.7 percent, growing from $7.5 billion to $19.7 billion as of June 30, 2012. During the same period, the U.S. equity market, as measured by the S&P 500 Total Return Index, increased by an average of 5.3 percent per year, and the U.S. bond market, as measured by the Barclays Aggregate Bond Index, increased 5.6 percent per year.
"Fiscal year 2012 was a challenging year for international equity markets, which was a drag on the portfolio. Nevertheless, we exited the year with improved liquidity and a high-quality portfolio in the face of a macroeconomy which still poses significant risks," said John Powers, CEO of the Stanford Management Company.
Stanford University's endowment rose in value by 3.2 percent over the past year to a value of $17.0 billion as of Aug. 31, 2012, 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 endowment, offset by the annual payout for university operations. The university's endowment payout for fiscal year 2012 was $872 million, equal to 5.3 percent of the beginning-of-year endowment value. Budgeted endowment payout for fiscal year 2013 is $926 million, or 5.4 percent.
"Thanks to the generosity of Stanford's donors and disciplined financial management, and despite low investment returns, the endowment had modest growth last year," said Randy Livingston, university vice president for business affairs and chief financial officer. "Our endowment is still smaller than preceding the 2008-09 financial downturn, and we continue to be concerned about the possible reductions in federal research funding and an investment downturn driven by global economic malaise."
For detailed information about the Stanford University budget, including the 2012 Stanford University Budget Plan, see http://www.stanford.edu/dept/pres-provost/budget/plans/index.html and http://bondholder-information.stanford.edu.