Harvard University already had the largest endowment of any school in the world. Now, however, it’s even larger. Yesterday, the University reported their endowment has earned a profit of $4.4 billion in fiscal 2011, growing to $32 billion, according to the Boston Globe.
This marks the second year in a row of growth for the University, as the endowment grew to $27.6 billion in the 2010 fiscal year. Over the past 20 years, the endowment has received an annual return of 12.9 percent.
Jane Mendillo, Harvard Management Company President and CEO, told the Globe that “active management of investments to meet the primary objectives of growth, liquidity and risk management secured growth in the latest year.”
Harvard’s endowment helps provide financial aid for more than 60 percent of undergraduate students. The scholarships will total more than $160 million this year. The endowment also helps fund the school’s various educational and research programs, and comprises about 12,000 individual funds. The funds are invested by Harvard Management Company, that supervises the school’s pension, trust funds and other investments.
Whether the endowment will continue to grow over the next few years, Mendillo is uncertain, due to the current political and market turbulence.
“Since the end of the fiscal year, the markets have been exceptionally volatile, driven by concern and uncertainty related to the debt ceiling debate, the fate of the Euro zone, the S&P downgrade of the U.S. Treasury securities and indications of slowing growth in economies and home and abroad,” Mendillo said to the Globe. “The impact of these issues on our portfolio is unavoidable.”
There is still the potential for an uptick though.
“The good news is that we have gained flexibility through the restructuring of the portfolio in recent years, which allows us to take some advantage of declining valuations under the right circumstances,” Mendillo said.
If all goes, mostly, according to plan, Harvard could see another increase in its endowment next year.
