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Michigan State University Endowment Fund

Name: Michigan State University

Assets Under Management: $2 Billion (Source: Michigan State University on 6/30/2013)

Annual Report:  MSU Financial Report Year End 2013

Portfolio Insights: “This report presents Michigan State University’s financial position and results of operations for fiscal years ended June 30, 2013, and June 30, 2012. The financial report, adopted by the Board of Trustees, is provided as part of MSU’s commitment to report annually on its fiscal affairs. Plante & Moran, PLLC, certified public accountants, audited these financial statements, and their audit report appears on pages 15-16.

MSU has been working to advance the common good in uncommon ways for more than 150 years through more than 200 programs of study in 17 degree-granting colleges. Consistently ranked among the world’s top universities, MSU remains among the most efficient of its peer research institutions. As the nation’s pioneer land-grant university, MSU embraces its special mission of world-class instruction, research, and public service to solve the world’s most pressing problems.” (Source)

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Top Michigan State University Endowment Fund Headlines:

1) The value of Michigan State University’s endowment topped $2 billion for the first time in the 2013 fiscal year, the school said. The figure includes more than $300 million held by the MSU Foundation, which supports research and technology commercialization through organizations such as Spartan Innovations and MBI International.

The balance of the endowment is held in numerous funds designated for scholarships, faculty recruitment and support, research and other functions. The East Lansing school said strong investment returns helped boost endowment’s value.

The endowment passed the $1 billion mark in 2004, early in the public phase of a capital campaign that would raise more than $1.2 billion. Its value plummeted during the 2008 financial collapse, losing more than $300 million, but rebounded in the 2011 fiscal year. Endowment giving has mirrored those ups and downs, the school said. (Source)

2) Michigan State University’s endowment fund increased from more than $1.1 billion at the end of fiscal year 2010 to more than $1.4 billion at the end of of fiscal year 2011, a 22 percent increase good for the fifth-largest growth in the 12-member Big Ten. The National Association of College and University Business Officers’ 2011 Endowment Study recently reported those figures. The study highlights the percentage change in the market value of institutions’ endowment funds. MSU’s $1.4 billion endowment fund in 2011 is the 54th largest in the nation, but is only ahead of the universities of Nebraska ($1.24 billion) and Iowa ($1 billion) in the Big Ten. (Source)

3) Michigan State University, East Lansing, Mich., invested and committed a total of $85 million in three new investments for its $1.9 billion endowment. At a Dec. 13 meeting, the university’s board of trustees accepted the recommendation of its finance committee to invest $30 million from MSU’s common investment fund in the Edgbaston Asian Equity Trust, a global equity ex-U.S. strategy commingled fund.

The fund’s manager, Edgbaston Investment Partners, invests in companies in Asia ex-Japan, Australia and New Zealand, according to an investment recommendation memo to the finance committee from Mark P. Haas, vice president for finance and treasurer. Also approved was a $30 million investment in long/short equity hedge fund Pennant Windward Fund. The fund’s manager, Pennant Capital Management, uses a fundamental, bottom-up investment approach to invest primarily in U.S. equities, Mr. Haas’ memo said. (Source)

4) Michigan State University’s ambitious effort to raise $1.5 billion for its endowment by 2018 is a sign of a well run university planning for its future needs. The campaign, which begins its public phase in October, already has brought in more than $700 million in a “quiet phase” that began in 2011. Some would argue that university fundraising prowess is another sign that institutions of higher learning don’t need as much state support as they get. That’s a mistaken notion; indeed, one reason universities have increased fundraising is to offset the drop in state support that was accelerated by the recession. The university also uses large amounts to support financial assistance for students in need. Last year it spent more than $115 million on such aid, some of it from the endowment. (Source)

5) Michigan State University, East Lansing, invested $25 million in Kabouter Management’s international small-cap select fund for its $1.9 billion endowment. University trustees approved the recommendation of the board’s finance committee at their April 22 meeting, confirmed Jason Cody, an MSU spokesman, in an e-mail. The strategy uses a quantitative approach paired with fundamental analysis to identify highly profitable, small growth companies in developed international markets, according to a memo to MSU trustees from Mark P. Haas, vice president for finance and treasurer. (Source)

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