NMSU endowment earnings continue to outpace peers

February 10, 2012 by Julie M. Hughes, NMSU News Center

Like many university endowments across the country, the New Mexico State University Foundation endowment once again saw increased returns in 2011 and averaged higher returns than many endowments of a similar size, according to a joint study by the National Association of College and University Business Officers (NACUBO) and the Commonfund Institute released Jan. 31.

This is the second year in a row the endowment has outpaced its peers. The average annual total net returns for institutions having endowments of $101 million-$500 million for fiscal year 2011 was 19.7 percent. For that same time period, the NMSU Foundation return was 20.8 percent. The endowment in total is valued at $187 million.

“We are pleased to report these positive investment results, and I want to commend the efforts of the Foundation’s Investment Committee, which works diligently to grow the endowment and provide funds critical to NMSU’s mission. Growing our endowment is perhaps the single most important role the Foundation plays on behalf of the university,” said Dennis Prescott, Foundation president.

The 2011 NACUBO-Commonfund Study of Endowments (NCSE) gathered data from 823 U.S. colleges, universities and affiliated foundations. The average return for endowments of all sizes was 19.2 percent, which is an increase over the 11.9 percent reported during fiscal year 2010.

The study also looks at participants’ asset allocation and spending. The NMSU Foundation’s asset allocation model is heavily weighted to domestic stocks, international equities and fixed income. Only 22 percent is invested in the alternative market. This is a common practice among endowments of NMSU’s size. Larger endowments tend to invest more in alternative markets. NMSU’s spending rate, as a percentage of beginning market value, was 4.4 percent, which compares closely to the 4.5 percent overall average for all public institutions participating in the study.

The third annual NCSE for fiscal year 2011 is the result of a research partnership between NACUBO and Commonfund. Previously, the two organizations conducted separate studies of educational endowments’ investment performance. NACUBO is a membership organization representing more than 2,500 colleges, universities and higher education service providers across the country and around the world. Commonfund Institute is dedicated to the advancement of investment knowledge and the promotion of best practices in financial management.

For additional information about the NMSU Foundation, visit http://foundation.nmsu.edu

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