Rice endowment decreases $60 million
Hallie Jordan
Issue date: 9/26/08 Section: News
As the Wall Street collapse earlier this month indicated, times are tough for investments. Reflecting this trend, Rice's endowment this year has decreased $60 million from $4.67 billion to $4.61 billion. Nationally, Rice ranks 19th for the size of its endowment, and ranks sixth in amount per student according to the National Association of College and University Business Officers Endowment Study.
The endowment is a permanent investment that the university uses to support the general operation of the school, faculty chairs, scholarships, fellowships and departmental programs. The endowment is invested in U.S. stocks, international stocks, fixed income, hedge funds, private equity and real assents - which include real estate, oil and timber. It is invested with over 100 different investment managers and partnerships around the world.
Vice President for Investments Scott Wise said since the endowment is a permanent investment in the university, meant for long-term growth, its year-to-year fluctuations are not of much concern. He said the real concern lies with the cause of the endowment decrease, the decline of the U.S. stock market.
"I'm concerned about the extraordinarily difficult investing environment at this point in time, not so much about a 12-month period," Wise said.
About 45 percent of the university's yearly budget is covered by the endowment, one of the highest percentages in the nation, Wise said.
Kathy Collins, Vice President for Finance, said the endowment keeps tuition cheaper and covers many financial needs for students.
"First, it allows us to keep the tuition in range," she said. "Also, it covers about half of the financial aid and scholarships the university provides."
From 1912 to 1965, the endowment allowed Rice to keep tuition free.
"The business of being a university became more expensive with the technology advances in science and engineering," Wise said. "It wasn't viable to continue to be a great university and keep up with competition."
Rather than using endowment money for all expenses, Rice also relies on donor gifts, in which it received $42 million this year. These funds are used for a purpose specified by the donor, often new buildings or colleges, departments or scholarships.
The endowment is a permanent investment that the university uses to support the general operation of the school, faculty chairs, scholarships, fellowships and departmental programs. The endowment is invested in U.S. stocks, international stocks, fixed income, hedge funds, private equity and real assents - which include real estate, oil and timber. It is invested with over 100 different investment managers and partnerships around the world.
Vice President for Investments Scott Wise said since the endowment is a permanent investment in the university, meant for long-term growth, its year-to-year fluctuations are not of much concern. He said the real concern lies with the cause of the endowment decrease, the decline of the U.S. stock market.
"I'm concerned about the extraordinarily difficult investing environment at this point in time, not so much about a 12-month period," Wise said.
About 45 percent of the university's yearly budget is covered by the endowment, one of the highest percentages in the nation, Wise said.
Kathy Collins, Vice President for Finance, said the endowment keeps tuition cheaper and covers many financial needs for students.
"First, it allows us to keep the tuition in range," she said. "Also, it covers about half of the financial aid and scholarships the university provides."
From 1912 to 1965, the endowment allowed Rice to keep tuition free.
"The business of being a university became more expensive with the technology advances in science and engineering," Wise said. "It wasn't viable to continue to be a great university and keep up with competition."
Rather than using endowment money for all expenses, Rice also relies on donor gifts, in which it received $42 million this year. These funds are used for a purpose specified by the donor, often new buildings or colleges, departments or scholarships.
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