Reallocation, Cost-Cutting Earn Dividends

The value of the investments portfolio of Vanderbilt University’s endowment fell 16.3 percent in the fiscal year ending June 30, one of the most challenging financial periods in modern American history.

Vanderbilt has weathered the downturn relatively well when measured against many schools. Prior to a huge stock market sell-off, Vanderbilt repositioned substantial assets, according to Matthew Wright, vice chancellor for investments at Vanderbilt. Vanderbilt’s losses averaged about half that of Wall Street during the same period. “This afforded Vanderbilt the opportunity to reallocate as the equity market recovered in the spring.”

The 16.3 percent decline does not represent the entire endowment, which has assets in addition to its investment portfolio and also continues to receive donations. The preliminary, unaudited value of the endowment as of June 30 was $2.8 billion, down from $3.5 billion on June 30, 2008.

Cost-cutting measures were adopted as a cautionary measure during the financial crisis, with most departments reducing budgets by 5 percent or more. New construction continues to be on hold.

Vanderbilt continues with initiatives to reduce student debt by replacing loans with grant money.

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