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Spelman College Endowment Fund

Name: Spelman College Endowment

Assets Under Management: $523.7 Million (Source: Spelman College on 6/30/2013)

Annual Report: Spelman College Financial Statements June 30, 2013 and 2012

Portfolio Insights: “Spelman College (the College) is a private, non profit institution of higher education located in Atlanta, Georgia. The College provides education and training services for students at the undergraduate level and performs research, training, and other services under grants, contracts, and similar agreements with sponsoring organizations and governmental agencies.

The College’s investment portfolio is subject to interest rate and credit risks for certain securities whose valuation would be impacted by changes in interest rates. The portfolio is also subject to the risk where the issuer of a security is not able to pay interest or repay principal when it is due.” (Source)

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Top Spelman College Endowment Fund Headlines:

1) On July 1, 1982, the Spelman College Special Ventures Fund was incorporated with the purpose of investing part of the Spelman College endowment in private capital partnerships. At the time, the endowment was about $55 million, recalls Danny Flanigan, Spelman’s Vice President for Business and Financial Affairs & Treasurer. The fund’s first investment was a commitment to a venture capital partnership — $2 million. The thought of making a commitment of that magnitude spawned a good deal of debate among board members. The skeptics were persuaded, however, and the investment with that partnership went forward. Eight years later, Flanigan went to Palo Alto for a meeting of the limited partners and learned that Spelman would be receiving a check for $23 million. “It was an annual internal rate of return (IRR) of something like 87 percent,” Flanigan reflects. “When I returned to Atlanta, we were still a little incredulous. Jonathan Smith, who was at that time, and still is, chair of the investment committee, said to me, ‘We’ve got to pick up that check, Flanigan, before we tell any-body.’ (Source)

2) Spelman College is a four-year liberal arts women’s college located in Atlanta, Georgia. The college is part of the Atlanta University Center academic consortium in Atlanta. Spelman holds the distinction of being America’s oldest historically black college for women.

Spelman has amassed an endowment fund of over $291 million, and is ranked currently at 75 in the 2008 U.S. News and World Report ranking of all U.S. liberal arts colleges. The 2008 U.S. News and World Report also ranked Spelman first among Historically Black Colleges and/or Universities.Campus: A historic campus of 32 acres, dating back to 1883, five minutes west of downtown Atlanta. There are 25 buildings, including Sisters Chapel, Giles Hall, Packard Hall, Rockefeller Hall and Reynolds Cottage. The Camille O. Hanks Cosby Academic Center was dedicated in 1996, and a new state-of-the-art Science Center houses classrooms and labs. (Source)

3) Spelman College’s endowment fund was reportedly worth more than $350 million in 2010, making it the largest private endowment of all historically black colleges and universities, and second only to Howard University in largest overall endowment.

Though Spelman’s endowment is only a fraction of those at predominantly white universities like Harvard, whose $26 billion fund top all U.S. colleges, the fund’s impressive growth is a testament to its success cultivating a host of alternative investment strategies.

Typically, most schools rely on financial instruments like government securities that carry little risk, provide a secure revenue stream, but ultimately offer a small return. In contrast, Spelman’s endowment has posted better than average returns by dedicating much of its fund to private equity. (Source)

4) The latest is Spelman College in Atlanta, which indicated that it is “suspending a professorship” endowed by a 1987 Cosby donation. The William and Camille Olivia Hanks Cosby Endowed Professorship was established to bring positive attention and accomplished visiting scholars to Spelman College. However, the college is now suspending that professorship indefinitely. (Source)

5) Spelman College is proud to have “the second largest endowment fund among HBCUs with a value of $351,706,000.” Clearly, the Black Atlanta institution has invested profitably, but what of its moral and political obligations? Spelman’s relative wealth has been gained through investment decisions in Africa and elsewhere that are “bound to be implicated in the exploitative actions of the West.” (Source)

About Richard C. Wilson