Endowment hit hard by Hedge Fund crash

[Globalist]

<p>Haha, Barrons. I wish I read your silly post earlier in the week. Give me break! We all laughed when we read that article written by a Yalie who isn’t even a member of the Yale Club of NY. He opines without quoting actual members. If it wasn’t for Dartmouth’s and UVA’s members, the Yale Club would have gone down long time ago. If they didn’t need us and didn’t think we were ‘worthy’, they wouldn’t have invited UVa alumni to join their clubhouse in the first place - a move that required a vote from the YC Board. They could have easily invited Duke or Stanford long time ago, but they chose UVa and gave us residency and office space for our executive director and volunteers. (That’s much more than Duke gets from the Cornell Club.) If there are snooty grumblings, they probably come from the old Yalies – the same members who were peeved when they allowed women to join in ‘80’s and were belligerent to gay alums who wanted to have events at the Club. I remember a joint board meeting between the 3 schools many years ago. The board members from Yale and Dartmouth were all old white men. UVA’s board was young, half of which were women, a quarter were minorities, and an eighth were gay. We had the cool ideas and events (and the cute members. Yale and Dartmouth guys always seem to talk about the hot UVa girls), and happily, the Yale Club has learned from us. Thankfully, the overall Clubhouse is much cooler now, and the UVa Club have more members than Dartmouth.</p>

<p>Hmmm…I wonder what great club Wisconsin has been invited to join?</p>

<p>Barrons, you should really start reading your school paper more. UW is not as insulated as you think. The Badger has highlighted for some time now the [economic</a> problems](<a href=“http://badgerherald.com/news/2008/10/20/economic_crisis_hits.php]economic”>http://badgerherald.com/news/2008/10/20/economic_crisis_hits.php) in Wisconsin, the [forced</a> cutbacks](<a href=“http://badgerherald.com/news/2008/10/17/deficit_will_likely_.php]forced”>http://badgerherald.com/news/2008/10/17/deficit_will_likely_.php) at UW, and the [lagging</a> of state money](<a href=“http://badgerherald.com/news/2008/09/24/state_funding_of_uw_.php]lagging”>http://badgerherald.com/news/2008/09/24/state_funding_of_uw_.php). </p>

<p>I think UVa will come out fine after this economic crisis is over. I think these are the key points from [Leonard</a> Sandridge’s letter](<a href=“http://www.virginia.edu/uvatoday/newsRelease.php?id=6980]Leonard”>http://www.virginia.edu/uvatoday/newsRelease.php?id=6980):</p>

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When the economic crisis hit in late summer, the long-term pool invested by the University of Virginia Investment Management Company (UVIMCO) decreased from $5.1 billion on June 30 to $4.2 billion on Oct. 31. This is a 20 percent decrease; the S & P 500 index dropped 24 percent over the same period.

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We have seen economic instability in the past, managed through it and emerged stronger. During the first Gulf War, the University’s endowment reported a negative 10.2 percent for the third quarter but finished fiscal year 1991 at plus 8 percent. During the 1987 stock market crash, the endowment reported a negative 12.2 percent for the fourth quarter but closed out the fiscal year at no loss._We are drawing on our experience of earlier downturns and working to maintain our momentum as the economy slows. In fact, we plan to take advantage of some of the investment opportunities that are emerging. You should also know that while we are feeling the effect of the external markets, additions continue to be made to the long-term investment pool: $150 million has been added since July 1.

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Last June, the Board of Visitors approved an increase in the annual distribution of the endowment from 4.5 percent to 5 percent, which translates to $161 million in fiscal year 2008-2009. We will make this distribution as planned despite the current economic conditions. As a result, our schools and departments will have more resources at their immediate disposal.

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