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Pennsylvania State University Endowment Fund

Name: Pennsylvania State Office of Investment Management (OIM)

Assets Under Management:  $3.43 Billion (Source: on Pennsylvania State University 6/30/2014)

Annual Report:  Pennsylvania State University Endowment Fund’s Investment Review for Fiscal 2014

Portfolio Insights: “Endowment assets increased by $352 million during fiscal 2014, from $1.93 billion to $2.28 billion. As seen in the table on page 2, endowed gifts added over the last 12 months totaled $92 million, while endowment program support (spending) amounted to $75 million. Current endowment spending has been approved by the Board of Trustees to remain at an annual rate of 4.5%.

As of June 30, the market value of the Long-Term Investment Pool totaled $3.54 billion, including $1.14 billion in non-endowed assets that have been commingled for investment purposes, but are restricted to the on-going funding of the University’s FAS 106 liability, per above.” (Source)

Our team, the Endowment Fund Association (EFA) and is the #1 community and most visited website dedicated to endowment fund professionals.  We provide endowment funds with buy-side co-investment and direct investment deal origination services, outsourced chief investment officer selection help,  and also provide Endowment 500 research and Endowment Database Solutions.

Top Pennsylvania State University Endowment Fund and  Pennsylvania State Office of Investment Management (OIM) Headlines:

1) Pennsylvania State University–University Park is a public institution that was founded in 1855. It has a total undergraduate enrollment of 40,085, its setting is urban, and the campus size is 8,556 acres. It utilizes a semester-based academic calendar. Pennsylvania State University–University Park’s ranking in the 2015 edition of Best Colleges is National Universities, 48. Its in-state tuition and fees are $17,502 (2014-15); out-of-state tuition and fees are $30,452 (2014-15). (Source)

2) The Office of Investment Management (OIM) oversees the day-to-day management and administration of University investment funds. OIM submits policies and practices as appropriate for achieving investment and spending objectives to the Penn State Investment Council (PSIC) and Board of Trustees for their approval.

To accomplish these objectives, the investment office provides reports, analyses, and recommendations on investment policies, asset allocation, and endowment spending to PSIC. OIM conducts due diligence in manager searches and closely monitors external investment managers hired to invest the funds.

The University’s investment funds include the endowment pool, as well as non-endowed and other endowment-like funds. The endowment pool is a commingled fund of endowment assets that is broadly diversified among stocks, bonds, venture capital, private equity, hedge funds, and real estate.

In addition to benchmarking against various market indices, the University compares asset allocation, spending policies, and investment returns against a peer group of universities that include the Big Ten schools and similar public universities in the mid-Atlantic region. (Source)

3) Pennsylvania State University’s $1.83 billion endowment is likely to weather the school’s coaching scandal with no permanent scarring, endowment experts believe.

On Nov. 21, Moody’s Investors Service warned of “material risks” for the school, including a chill on admissions and reduced state and federal funding to support the $4.5 billion operations budget.

There is no question that Penn State as a whole will experience what Moody’s experts call “reputational damage and elevated financial risk … stemming from allegations of sexual abuse by an assistant football coach,” but the ratings agency’s report also noted that the endowment enjoyed $235 million in total private giving this year, “among the highest of all US public universities.”

When asked how such a scandal could affect an endowment, John Griswold, executive director of Commonfund, Wilton, Conn., said: “There might be a temporary lull (in giving), but it tends to come back. (Source)

4) As a donor-advised fund, the Pennsylvania State University Charitable Gift Fund (PSUCGF) is a convenient, flexible, and cost-effective way to support Penn State and other causes that matter to their donors. Individuals establish a fund at Penn State that becomes a source for their future grant distributions, and for managing their overall charitable activity. Donors receive immediate online access to information on programs and initiatives currently underway at Penn State and will be able to connect to other alumni and friends through the innovative online charitable communities. Penn State provides investment management for the funds, accepts additional future contributions, and processes grant recommendations as donors direct. At least 50 percent of gifts made from the fund must be directed to Penn State, but the remainder of donors’ gifts may go to any eligible charity. Successors can continue to direct gifts from the fund and continue a family’s philanthropic legacy at Penn State and in the wider world. (Source)

5) Pennsylvania State University, University Park, made four commitments totaling $52.5 million for its long-term investment pool, said an investment review in upcoming board of trustees meeting materials.

The Penn State Investment Council, which oversees the investment management of the long-term investment pool, committed $20 million to Natural Gas Partners XI, a private equity fund managed by NGP Energy Capital Management that invests in the North American oil and natural gas industries.

The council also committed $15 million to Och-Ziff Real Estate Fund III, an opportunistic real estate fund managed by Och-Ziff Capital Management Group; $10 million to venture capital fund Sofinnova Venture Partners Fund IX, managed by Sofinnova Ventures; and $7.5 million to Charles River Partnership XVI, a venture capital fund managed by Charles River Ventures. (Source)


About Richard C. Wilson