Bowdoin Endowment Surpasses $1 Billion on Investment Return of 16.0%; Mills Links Growth to Affordability

Bowdoin Gateway

 

The Bowdoin College endowment has surpassed the $1 billion mark for the first time in the school’s 219-year history.

The endowment, of which approximately 45% is restricted to the support of student financial aid, generated an investment return of 16.0% for the fiscal year that ended June 30, 2013.

The Bowdoin investment return of 16.0% compares with the mean return of 11.6% for college and university endowments as reported by Cambridge Associates, a firm that tracks performance of foundations and endowments nationwide. Bowdoin’s fiscal year return is in the top 5% of peer returns.

“This is a phenomenal accomplishment for our College,” said Bowdoin President Barry Mills. “It is due to the enormous generosity of our alumni, parents, and friends. It is also due to the prudent and brilliant management of our endowment by our senior vice president for investments, Paula Volent, and an investment committee that is thoughtful, nimble, and disciplined.”

As of June 30, 2013, the three-, five-, and ten-year annualized returns for Bowdoin’s endowment were 13.3%, 5.9%, and 10.3%, respectively—all top 5% among comparative college and university annualized returns. Bowdoin’s endowment consists of over 1,600 individual funds earmarked for the perpetual support of a variety of College initiatives.

“Our College must be affordable to the middle class of America. Since [our] ever increasing costs are not matched by an ability to charge parents and families additional fees, we must rely more and more on [income from] the endowment to meet our expenses.” —President Barry Mills

On June 30, 2013, Bowdoin’s endowment was valued at $1,038,640,000. During the fiscal year, the College received approximately $33 million in endowment gifts and additions, and provided $38.1 million to the annual operations of the College. Of this, approximately $17 million supports financial aid. Admission to Bowdoin is “need blind,” which means students are admitted without regard to their economic need. In 2008 the College adopted a “no-loan” policy, replacing student loans with grants.

In remarks delivered at Bowdoin’s opening Convocation earlier this month, Mills reminded students, faculty, and staff that Bowdoin’s affordability is linked inextricably to the endowment.

“Our College must be affordable to the middle class of America,” said Mills. “Since [our] ever increasing costs are not matched by an ability to charge parents and families additional fees, we must rely more and more on [income from] the endowment to meet our expenses.”

Bowdoin’s endowment portfolio is diversified across different asset classes including domestic and international equities, fixed income, private equity, real estate and absolute return strategies. All asset classes are invested through a selection of external investment managers or through market indices. The portfolio is structured with a long-term time horizon, with portfolio diversification and manager selection directed toward protecting endowment capital in challenging investment environments, while growing those assets during periods of economic stability and growth.

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Comments

  1. WOW!! Congratulations! Go U Bears. I know Bowdoin lives up to: ” For the common good” as this endowment has helped many without which Bowdoin would not be financially possible. Many ,many thanks.
    The Belmonte Family

  2. Merton Henry says:

    A superb performance. Congratulations to all.

  3. Congratulations to Paula, her team and the Investment Committee for their outstanding portfolio construction, manager selection and investment management.

  4. Christopher Hanks says:

    Look out Harvard!

  5. Super proud of the College investment committee and the commitment to staying need blind in admissions.

  6. Bruce Jordan says:

    I like the link Pres. Mills makes between the large endowment and efforts to extend the affordability of the College. I don’t see other college presidents sticking out their necks that way.

  7. Was that return net of fees?

  8. Christine James says:

    I wish President Mills and Senior VP for Investments, Paula Volent, were as concerned for middle class (and I’d add, poor) families’ access to clean air, clean water and a stable climate as they are for such families’ access to a Bowdoin education. Helping fossil fuel companies continue their reckless pursuit of profits over people and the planet seems far too high a price to pay for providing scholarships. (Just to be clear: I had some scholarship assistance to get through Bowdoin in the early 1980s, but I also left with significant student loan debt.) If I were high school student today, I’d be looking for a college whose administration had the moral commitment and investing savvy to pursue the very real pathways for realizing a significant return for the endowment by avoiding fossil fuel investments and seeking out opportunities in the clean energy sector. Bowdoin has done a great deal to green the campus since I graduated in 1984, including funding important sustainability measures such as energy conservation, recycling, offering locally-sourced food in the dining halls, and instituting environmentally preferable purchasing initiatives. But all of these are half measures while the school continues to profit from its fossil fuel investments. I’m disappointed that my alma mater isn’t among the vanguard of higher education institutions across the country and the globe that are using the power of their position to take away the social license of the fossil fuel industry to profit from polluting. What good is a world class education for your child if the world you’re leaving her is unlivable?

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