September 24, 2014
Stanford Management Company releases 2014 results
The Stanford University Merged Pool (MP) achieved a 17 percent investment return for the 12 months that ended June 30, 2014, 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 9.9 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 7.8 percent per year; the U.S. bond market, as measured by the Barclays Aggregate Bond Index, increased 4.9 percent per year.
"During fiscal 2014, U.S. public and private equity markets, particularly venture capital, delivered strong returns as the low-interest-rate environment and ongoing economic recovery provided support. Non-U.S. markets were positive, though without the broad-based strength we saw in the U.S. While the endowment has benefited from U.S. public and private market strength, we remain committed to a globally diversified portfolio with a fundamental value orientation, " said John Powers, CEO of the Stanford Management Company.
Stanford University's endowment rose in value by 14.8 percent over the past year to a value of $21.4 billion as of Aug. 31, 2014, the last day of Stanford's fiscal year. The change 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 2014 was $985 million, equal to 5.3 percent of the beginning-of-year endowment value. Budgeted endowment payout for fiscal year 2015 is $1.065 billion, or 5 percent.
"Thanks to the generosity of Stanford's donors and these excellent investment returns, the endowment increased significantly last year," said Randy Livingston, vice president for business affairs and chief financial officer. "This growth will support Stanford’s strategic initiatives, including interdisciplinary research and possible future expansion of the undergraduate student body, while helping to offset reductions in federal research funding."