Hoping to use that summer job money to break into the red-hot venture capital market? Maybe you should get some advice from the University Treasurer's office.
The University reported a 43.7 percent return rate on its investments in the 1999-2000 fiscal year, led by a whopping 400 percent gain in its venture capital division.
University Treasurer Alice Handy credited the bulk of the gains to the venture capital investments, which account for 20 percent of the University's portfolio. The University began acquiring venture capital mutual funds in 1988 and has increased its holdings steadily since then. The venture capital investments made a 40 percent profit in 1998.
"We were lucky enough to get in on some of the best venture capital funds early," Handy said.
Because of investment profits and fundraising efforts, the University's overall endowment increased from $1.4 billion to $1.73 billion last year.
Other national universities made large profits on their investments last year as well. Duke University led the pack with a 58.8 percent return rate, while Notre Dame reported 57.9 percent. Yale University, Dartmouth College, the University of Michigan, the University of Chicago and the University of Southern California all reported gains of over 40 percent.
"The big gainers were those with large investments in venture capital," Handy said, noting that the average investment return for American colleges and universities last year was 13.5 percent.
The University's investment portfolio is managed by the University Treasurer's office in cooperation with the University of Virginia Investment Management Company (UVIMCO), a committee composed of Board of Visitors members and other financial professionals.
"UVIMCO's support makes possible strategic investments that would simply be out of reach if our investment officers acted purely on their own initiative," University President John T. Casteen III said.
Because of the higher returns, the distribution of endowment earnings will be increased by 30 percent over last year's payout, rather than the standard 4 to 5 percent annual increase to cover inflation.
"The increased market value of the endowment and the resulting increase in the amount that can be distributed will provide more resources to the schools for their academic purposes," said Leonard W. Sandridge, University executive vice president and chief operating officer.
The University plans to increase investment in the venture capital market in the future despite its volatility compared to other investments such as real estate and bonds, Handy said.
"The UVIMCO board and Bill Goodwin [Board of Visitors Finance Committee chairman and UVIMCO chairman] have seen this as a potential winner," Casteen said.
But the 43.7 percent return rate will be nearly impossible to maintain next year because of the unpredictability of the stock market, Casteen said.
"This is a very unusual situation, not one anyone has seen previously," he said.
"Last year's returns were what I would consider once in a career," Handy said.
Read More
MLK III to focus on youth participation in politics as professor of practice
By Ford McCracken | 2 hours agoRestrictive voting laws are only one problem with voting today, according to King — the other is voter apathy. King even called the level of voter participation in U.S. elections “abysmal.”
New School of Data Science building opens with remarks and ceremony
By Cecilia Mould | YesterdayThe four-story, 61,000 square-foot building includes four classrooms and two seminar rooms, as well as a two-story central hub for hosting events.
Democratic Futures Project fellow Félix Maradiaga announces campaign to end arbitrary detention
By Caroline Hagood | YesterdayA public website for the campaign launched Friday, which Maradiaga says is the first step towards raising awareness.
