Wow....did not release how large PSU's endowment has grown

[IANit]

I was looking at college endowments because I was curious about MSU's standing. In 2016 they had somewhere around $2.25 billion. It actually dropped a bit from $2.7 billion in 2015. So far they've opened a $10 million fund. I think they're going to have to go quite a bit higher than that.

What was shocking to me is that in 2007 Penn State had a $1.59 billion system-wide endowment, and by 2016 hat had grown to $3.602 billion. So we have an unprecedented to that point scandal that cost hundreds of millions in payouts, legal fees and fines. We fire our iconic coach, our president, our VP of Finance and our AD and we still more than doubled the endowment over that time period? How is that possible? Some like Texas had much larger absolute gains over the time period, but none more than doubled their endowments. What's the story there?

 

[fairgambit]

 

[CampbellLION]

One word...MAGA!

 

[PSU65]

A comment by psuro would be appreciated.

 

[fastlax16]

I was looking at college endowments because I was curious about MSU's standing. In 2016 they had somewhere around $2.25 billion. It actually dropped a bit from $2.7 billion in 2015. So far they've opened a $10 million fund. I think they're going to have to go quite a bit higher than that.

What was shocking to me is that in 2007 Penn State had a $1.59 billion system-wide endowment, and by 2016 hat had grown to $3.602 billion. So we have an unprecedented to that point scandal that cost hundreds of millions in payouts, legal fees and fines. We fire our iconic coach, our president, our VP of Finance and our AD and we still more than doubled the endowment over that time period? How is that possible? Some like Texas had much larger absolute gains over the time period, but none more than doubled their endowments. What's the story there?

Penn State bought a lot of bitcoin.

 

[Rip_E_2_Joe_PA]

I was looking at college endowments because I was curious about MSU's standing. In 2016 they had somewhere around $2.25 billion. It actually dropped a bit from $2.7 billion in 2015. So far they've opened a $10 million fund. I think they're going to have to go quite a bit higher than that.

What was shocking to me is that in 2007 Penn State had a $1.59 billion system-wide endowment, and by 2016 hat had grown to $3.602 billion. So we have an unprecedented to that point scandal that cost hundreds of millions in payouts, legal fees and fines. We fire our iconic coach, our president, our VP of Finance and our AD and we still more than doubled the endowment over that time period? How is that possible? Some like Texas had much larger absolute gains over the time period, but none more than doubled their endowments. What's the story there?

We got pissed off by the f'ing that the B1G assholes and NotCAA and Corbuttocks and Freek and the BOTBOTS et all did to the university, to Joe, to all that was honorable about PSU and we manned up to save the ship from the fools at the helm.

 

[Fox Chapel Lion II]

Mark Dambly walking around with a giant stiffy.

 

[91Joe95]

I was looking at college endowments because I was curious about MSU's standing. In 2016 they had somewhere around $2.25 billion. It actually dropped a bit from $2.7 billion in 2015. So far they've opened a $10 million fund. I think they're going to have to go quite a bit higher than that.

What was shocking to me is that in 2007 Penn State had a $1.59 billion system-wide endowment, and by 2016 hat had grown to $3.602 billion. So we have an unprecedented to that point scandal that cost hundreds of millions in payouts, legal fees and fines. We fire our iconic coach, our president, our VP of Finance and our AD and we still more than doubled the endowment over that time period? How is that possible? Some like Texas had much larger absolute gains over the time period, but none more than doubled their endowments. What's the story there?

Umm, the last major fundraiser ended well past 2007. Hint, fundraising dropped like a rock after the scandal. Even without the scandal, the university would have a half billion more.

 

[LurkerLazarus]

Why would you believe anything that they tell us, anyhow? Every word out of the leadership's mouth is a lie. This could easily be more bullshit just to keep the stench covered up.

Along the same lines, apparently fund raising for the stadium/sports facilities upgrades is doing very poorly. Why would that be, if people are otherwise giving money to the university hand over fist like never before?

 

[Fox Chapel Lion II]

Every word out of the leadership's mouth is a lie.

Truth.

 

[fairgambit]

A comment by psuro would be appreciated.

 

[LurkerLazarus]

I stopped dating her, because she just refused to keep a low profile. I got tired of it.

 

[sluggo72]

I was looking at college endowments because I was curious about MSU's standing. In 2016 they had somewhere around $2.25 billion. It actually dropped a bit from $2.7 billion in 2015. So far they've opened a $10 million fund. I think they're going to have to go quite a bit higher than that.

What was shocking to me is that in 2007 Penn State had a $1.59 billion system-wide endowment, and by 2016 hat had grown to $3.602 billion. So we have an unprecedented to that point scandal that cost hundreds of millions in payouts, legal fees and fines. We fire our iconic coach, our president, our VP of Finance and our AD and we still more than doubled the endowment over that time period? How is that possible? Some like Texas had much larger absolute gains over the time period, but none more than doubled their endowments. What's the story there?

the S&P 500 on 1 1 2007 was 1618 today it is over 2800, you do the math, assuming PSU invested the money

 

[Nitwit]

The fundraiser that ended around 2015 raised $2.2 billion. The balance is helped by the current stock market, but it’s also true that donors stepped up after the Sandusky mess and contributed. It was a FU moment for the NCAA to let everyone know that the university was much bigger than its football program.

 

[PSU65]

I was looking at college endowments because I was curious about MSU's standing. In 2016 they had somewhere around $2.25 billion. It actually dropped a bit from $2.7 billion in 2015. So far they've opened a $10 million fund. I think they're going to have to go quite a bit higher than that.

What was shocking to me is that in 2007 Penn State had a $1.59 billion system-wide endowment, and by 2016 hat had grown to $3.602 billion. So we have an unprecedented to that point scandal that cost hundreds of millions in payouts, legal fees and fines. We fire our iconic coach, our president, our VP of Finance and our AD and we still more than doubled the endowment over that time period? How is that possible? Some like Texas had much larger absolute gains over the time period, but none more than doubled their endowments. What's the story there?

It’s Actually the 3rd highest in the B10.

 

[PSU65]

Probably the best endowment in the conference.

 

[LurkerLazarus]

If people are donating so freely, surely the funds for remodeling the stadium, renovating Lasch, etc etc, should all be in the bank by now.

Although, if true, you wonder why they have to enroll 40% of the kids coming in as out of state students, paying the full freight. Unlike, say, North Carolina, which has something like 85% in-state.

Only a fool would believe that this university is rolling in cash. A total fool.

 

[PeetzPoolBoy]

Is that you with the camera strategically placed in the “palm of your hand”?

 

[Fizz1]

I believe the mandatory tax deductible contribution to buy a season football ticket counts in the fund raising campaign statistics. Not sure how that money is ultimately used by PSU and if it goes into the endowment. It would not account for the increase, regardless. The contribution amount varies depending upon seat location. A big chunk of change.

 

[fairgambit]

Is that you with the camera strategically placed in the “palm of your hand”?

 

[Lion8286]

Wow....did not realize how large PSU's endowment has grown

 

[91Joe95]

The fundraiser that ended around 2015 raised $2.2 billion. The balance is helped by the current stock market, but it’s also true that donors stepped up after the Sandusky mess and contributed. It was a FU moment for the NCAA to let everyone know that the university was much bigger than its football program.

It ended earlier. Step started being counted as a "donation."

 

[Nitwit]

"The fundraiser that ended around 2015 raised $2.2 billion."

Uh....lmao

Not unless the are lying on their financial statements
(Linked them in an earlier post for your convenience)

"But it’s also true that donors stepped up after the Sandusky mess and contributed."

Uh.....lmao , again.

If you say so - but not unless you think going from $136 Million to $95 Million is an increase .
(linked in those statements for you as well)


And Penn State's endowment - which was 8th in the Big Ten (out of 11 Universities) in 2009, before they started to lump in retiree benefits to the total:

http://onwardstate.com/2010/02/23/big-ten-endowments-report/#prettyPhoto

Suddenly DID jump up to 4th - when they dropped in $1,000,000,000 of non-endowment funds to the report. LOL
(Honestly though, who - among their target audience - is NOT stupid enough to swallow that up? We know even the most responsible and informed - the Trustees - never bat an eye )

Contributions do not necessarily go into the endowment. Mine didn’t. I wanted them gifted immediately to my specified scholarships. But don’t let the facts spoil your negative rant, moron.

 

[PSU65]

Is it?

Yes. According to this (all listed except for MD which is less than a billion).

https://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment

 

[nits74]

Is it?

Who knows, but there must be an inverse relationship at work here as we can take pride that we now rank 10th academically within the conference! That's enough for me to know that these guys do indeed know what they're doing. For the Glory.

 

[roswelllion]

It never ceases to amaze - how so many people can draw "conclusions" regarding shit that they know nothing about...... especially when it would be so easy to cure their ignorance (with just a minimal amount of effort to educate themselves).


FOOTNOTES are there for a reason folks. SMFH

HERE IS THE FOOTNOTE:

"As described in footnote #3 below, approximately $1 billion earmarked to fund FAS 106 liabilities (postretirement health care benefits for PSU retirees) was commingled into the University’s Long-Term Investment Pool (LTIP) over the past four years. Prospectively, the reported market value, and related analysis, for LTIP will include all commingled funds, as shown below for June 30, 2013."

Here is the full report:

http://www.psu.edu/oim/gallery/5yrfiscal16.pdf

The large percentage of the "growth" of the endowment, as reported by the OP, was not growth at all - - - - it was the result of a change in accounting (in 2010) where the University Budget Office began reporting the funds set aside for employee retirement benefits as part of the "endowment" report.

http://www.psu.edu/oim/gallery/5yrfiscal16.pdf

As one can see....the actual change in the Endowment was $1.708 Billion in 2011 to $2.347 Billion in 2016.
An annualized net return of just a hair over 6% net, about 10% gross.


Prior to 2010, the Penn State Endowment Report (technically the Long Term Investment Pool) was reported as simply the amount of funds in the Endowment (funds set aside for perpetuity, with only the earnings being used to pay for current "stuff")

Since 2010, Penn State added over $1,000,000,000 of other funds (money set aside to fund retiree benefits - which is certainly not "endowment" money) into the "Endowment" pool - for reporting purposes only (rather than having the reports separate).

Currently, the amount of the "endowment" which is actually the retiree benefit money is about $1.3 Billion. That is $1.3 Billion that is NOT growth of the endowment.

Here is the report:

http://www.psu.edu/oim/gallery/5yrfiscal16.pdf

________________________________________

The annualized net return of just a hair over 6% net, about 10% gross - - - is that any good?.

I could go over how that return compares the performance of the financial managers at other Universities (if you're curious, it ranks 27th out of 38 endowments tracked by the trade journals - which is higher than one might expect, given that Ira Lubert is the Chief Trustee influence on the investment committee)


________________________________________

And - no - contributions did not "pick up" post November 2011. Why anyone would say so - when it is so easy to get the facts - is astounding to me.

From the public reports:

Gifts:

2011 $136.3 Million
2012 $76.2 Million
2013 $73.9 Million
2014 $92.2 Million
2015 $130.3 Million
2016 $94.9 Million

Gifts today = 30.4% lower than 2011, (if adjusted for inflation, probably about 38% lower)

Make of that what you will...... but jeezus christmas - get the damn facts straight.

Or, maybe you could ask one of Penn State's many Trustees to go over it with you.....
I am SURE those responsible stewards are fully up-to-date with the fiscal parameters of the University.

Nicely done Norm!!!

 

[Nitwit]

So sayeth the "genius" who thinks that moving from $130 Million per year in donations - to $96 million per year in donations - is a big INCREASE.

Gotcha'
Bless your heart


And I'm sure your $2,000,000,000 donation just got lost in the paperwork somewhere.
Maybe shuffled off to the ledgers of the Petty Cash account..... or maybe Barron's Donut Fund account.

Whatever fits your never ending negative agenda. What did they do to you, turn you down for a job or something? I know where every cent I donate goes. You have no idea how much it is. I prefer to do something positive for the students of the university that put me in a position to be successful. I can make an impact on these kids lives, and I do, and I get a lot of satisfaction knowing I’m helping students who are needy. I hope they go on and accomplish great things in their lives, and when they do, pershaps they will help the students who follow them. Now why don’t you insult me personally as that appears to be your only (boring) tact when someone disagrees with you. Now excuse me while I put you back on ignore.

 

[91Joe95]

Whatever fits your never ending negative agenda. What did they do to you, turn you down for a job or something? I know where every cent I donate goes. You have no idea how much it is. I prefer to do something positive for the students of the university that put me in a position to be successful. I can make an impact on these kids lives, and I do, and I get a lot of satisfaction knowing I’m helping students who are needy. I hope they go on and accomplish great things in their lives, and when they do, pershaps they will help the students who follow them. Now why don’t you insult me personally as that appears to be your only (boring) tact when someone disagrees with you. Now excuse me while I put you back on ignore.

"Well, all monies are fungible."

- Rodney (under oath)

 

[LurkerLazarus]

"Well, all monies are fungible."

- Rodney (under oath)

"Especially, other people's money."

 

[Nitwit]

Hopefully they stopped wasting millions paying some BoT croney to actively manage the endowment to under perform the S&P.

I read an article some place that laid out how many BILLIONS are being lost by universities because they use hedge funds and actively manage their endowments. If they simply and cheaply put it into index’s their endowment performance would skyrocket. But...BoT’s never get called on it.

http://www.vanguard.com/pdf/s342.pdf

http://fortune.com/college-endowments-investing/

Careful-indexes would skyrocket as long as the market goes up. But indexes can also plummet when the market goes down, and eventually it will. You need to balance safety into the investment strategy. Even this bull market will eventually end, although it’s been an amazing run. If all you’re trying to do is mirror the market then indexes are fine. But sometimes you want to swap safety for returns.

 

[Pardlion]

Yeah, I usually need a release whenever the endowment starts to get big.

 

[BobPSU92]

Yeah, I usually need a release whenever the endowment starts to get big.

 

[PSU65]

As I said - you gotta' read the footnotes (and I linked the actual source documents in for ya')

Or - you can stick with what ya' got from WIKI
____________________________

FOOTNOTES are there for a reason folks. SMFH

HERE IS THE FOOTNOTE:

"As described in footnote #3 below, approximately $1 billion earmarked to fund FAS 106 liabilities (postretirement health care benefits for PSU retirees) was commingled into the University’s Long-Term Investment Pool (LTIP) over the past four years. Prospectively, the reported market value, and related analysis, for LTIP will include all commingled funds, as shown below for June 30, 2013."

Here is the full report:

http://www.psu.edu/oim/gallery/5yrfiscal16.pdf

The large percentage of the "growth" of the endowment, as reported by the OP, was not growth at all - - - - it was the result of a change in accounting (in 2010) where the University Budget Office began reporting the funds set aside for employee retirement benefits as part of the "endowment" report.

http://www.psu.edu/oim/gallery/5yrfiscal16.pdf
As one can see....the actual change in the Endowment was $1.708 Billion in 2011 to $2.347 Billion in 2016.
An annualized net return of just a hair over 6% net, about 10% gross.

So maybe our endowment is 2.6 vs. 3.6. It's still not among the lower numbers of the B10 as you claim. In fact the 2.6 would be 5th behind NW, Mich., OSU, and Minn.. In addition, how do you know what the accounting procedures of the other schools entail? Do you know for a fact that they don't use similar methods?

 

[BobPSU92]

WRONG. METRICS.

 

[kgilbert78]

I believe the mandatory tax deductible contribution to buy a season football ticket counts in the fund raising campaign statistics. Not sure how that money is ultimately used by PSU and if it goes into the endowment. It would not account for the increase, regardless. The contribution amount varies depending upon seat location. A big chunk of change.

As it does for almost all universities using a similar method (which is to say pretty much all of the big ones). No surprise there (true for many basketball programs as well)

 

[kgilbert78]

Penn State's Endowment - some facts, for those who are interested:

1) Penn State's Endowment is currently (as of end of 2017 FY) at $2.6245 Billion:

https://oim.psu.edu/sites/oim/files/5_year_fiscal_17.pdf




2) Penn State's Endowment is invested according to certain allocation guidelines:

An Investment Mix of : 72% Equity 21% Income 7% Hedge Funds

https://oim.psu.edu/sites/oim/files/bot_fiscal_17.pdf


3) The Long-Term Investment Performance of the Penn State Endowment, over the last five years, is:

2013 FY: 11.3%
2014: 17.9%
2015: 3.1%
2016: -0.8%
2017: 12.6%

https://oim.psu.edu/sites/oim/files/5_year_fiscal_17.pdf


Penn State's Endowment is "Actively Managed"....ie The Penn State Investment Committees allocate funds from the Endowment to various outside "Money Managers" - they invest the funds for Penn State.

4) Does Penn State have other options? Aside from "Active Management" through outside managers?
Yes, of course.

One option would be to allocate their investments into the various Indexes, in accord with the allocation guidelines.
If they did, they could simply choose to place the funds into the Vanguard Wellington Fund (as one example). This fund invests into indexes, allocated as:

65% Equity Indexes, 35% Fixed Income Indexes
(that is a slightly more conservative allocation then Penn State's, and should yield slightly lower returns, but it is very very similar to the PSU allocation. And it is a very good comparative.)

https://finance.yahoo.com/quote/VWENX/holdings?p=VWENX

What types of returns would have been generated with this "Non-Actively Managed" Strategy?

2013 FY: 17.4%
2014: 12.11%
2015: 6.47%
2016: 5.46%
2017: 11.03%


5) Running the Numbers:

If Penn State had simply (and for FREE) allocated their funds to a portfolio of indexes - that Mirrored the Endowments desired Asset Allocation - the endowment today would be worth:

$2.8885 Billion, as opposed to the current value of $2.6245 Billion

An increase, for those who are Math-challenged, of $264,000,000.
(not counting the dollars that would have been saved by not needing a cadre of Financial Professionals on the PSU Payroll)




Of course, if Penn State simply followed the Asset Allocation guidelines - and used free index funds for their investments.....
They wouldn't have been able to distribute Penn State's investment dollars to their buddies ----- I mean, to reputable Money Managers
It would be kind of hard to justify the small army of internal Finance Gurus - the Vice Presidents, Directors, Assistant/Associate etc Vice Presidents and what not......the "David Gray"s of the University (who pull in salaries that would choke a horse):

https://fandb.psu.edu/sites/fandb/files/8_1_2017_fb_org_chart_0.pdf


And they couldn't support the work of fine Money Management Firms (like Ira Lubert's), including those who are convicted of Securities Fraud and Bribery (like Och-Ziff)

https://www.nytimes.com/2016/09/30/business/dealbook/och-ziff-bribery-settlement.html


Oh, Well. Nothing to see here.

My wife has Wellington and it has been very good for her. I use index funds for the most part (our companies offer different plans).

 

[anon_xdc8rmuek44eq]

I'm not a math/investment guy - can anyone explain how/why U Texas has a $25 bn and easily the highest for a public university? Next closest is A&M and Michigan and they're less than half of UT.

 

[Art]

I'm not a math/investment guy - can anyone explain how/why U Texas has a $25 bn and easily the highest for a public university? Next closest is A&M and Michigan and they're less than half of UT.

That's the University of Texas System, which includes all of the branches, the medical institutes (like M D Anderson). One of the reasons is that for every barrel of crude lifted in Texas, a portion goes into this fund, as well as aTm's.