NMSU endowment earnings continue to perform well

February 25, 2014 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 2013 and averaged similar returns to 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 28.

The NMSU Foundation is a separately incorporated, nonprofit organization existing solely for the benefit of NMSU. The purpose of the Foundation is to secure, manage and invest private gifts for the benefit of NMSU’s teaching, research, extension education and public service programs.

The average annual total net returns for institutions having endowments of $101 million-$500 million for fiscal year 2013 was 11.9 percent. For that same time period, the NMSU Foundation return was 11.4 percent. The endowment in total is valued at $197 million.

“Once again, the NMSU Foundation Investment Committee has done an excellent job of growing the endowment and providing returns critical to NMSU’s mission,” said Tina Byford, interim NMSU vice president for university advancement and NMSU Foundation president. “Growing our endowment is perhaps the single most important role the Foundation plays on behalf of the university.”

The 2013 NACUBO-Commonfund Study of Endowments (NCSE) gathered data from 849 U.S. colleges, universities and affiliated foundations. The average return for endowments of all sizes was 11.7 percent, an improvement over fiscal year 2012.

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 23 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 4.05 percent, which compares to the 4.4 percent overall average for all public institutions participating in the study.

The NCSE for fiscal year 2013 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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