The first of many interesting June 30th, 2009 annual reports just popped up and – wow! – is it ugly.
Haverford posted a staggering 35.6% drop in endowment value from one year earlier. No wonder there hadn’t been any “updates on the economy” from the President.
With a total endowment of $336 million. $140 million is in Level 3 assets — the new accounting lingo for assets such as private equity partnerships for which there is no established market price.
With a total endowment of $336 million, they have about $192 million that is liquid within 12 months. They have $104 million of debt. And they have $140 million of outstanding cash calls that they expect to be called within the next four years.
I don’t know what their budget calls for, but last year’s endowment spending would be 7.3% of the new endowment number.
Essentially, they are going to have to cash out the entire liquid portion of their endowment to cover operating expenses and private equity cash calls over the next four years.
Breathtaking. I think there are going to be many more of these reports to come.
Page 13, far right column:
$335,977,000 Total Endowment Net Assets (June 2009)
$521,199,000 Total Endowment Net Assets (June 2008)
It’s a 36% year to year decline. The actual investment loss was 32.8%, then you have subtractions for operating draw and additions for gifts.
BTW, Bowdoin and Middlebury have posted their year end reports, too. Nothing stood out about Bowdoin except high cash call commitments (relative to their endowment size) and they borrowed $20 million in taxable bond debt in May 2009. I haven’t looked at Middlebury.