2008 Woodie Awards
Rollins College Endowment Ranks Close to Top in National Ranking
Cynthia Wood
Issue date: 3/25/05 Section: News
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With a one-year return of 22.6 percent, Rollins College ranked in the top 2 percent of more than 700 colleges and universities that participated in the National Association of College and University Business Officers (NACUBO) Endowment Study for the year ending June 30, 2004. Reported in the same study released on January 26, 2005, Rollins' three-year and five-year returns were ranked in the top 12 percent and 25th percent, respectively.
Several years ago Rollins engaged Hammond Associates to serve as the College's independent investment advisor. The firm led College staff and trustees through a process to clarify and quantify the long-term objective of the endowment, and to evaluate the existing traditional asset allocation.
"We determined that the existing asset allocation was not likely to produce an average 9 percent return to meet the spending, to account for inflation, and to produce a small measure of unencumbered growth," said George Herbst, vice president and treasurer. "As a result, a more diversified asset allocation was adopted. This included the College's first venture into alternative investments, an asset class that includes hedge funds and private equity. We also decided to utilize index funds for our allocation to large and mid-cap U.S. stocks."
The magnitude of this change in strategy resulted in the replacement of most of the existing investment managers. The College's current asset allocation is: 22 percent Large/Mid US Stocks, 8 percent Small US Stocks, 25 percent Non-US Stocks, 20 percent Fixed Income (including 7 percent TIPS), 25 percent Alternative Assets (REITs/Real Assets, Private Equity & Absolute Return)
Rollins recently received a $93.3 million bequest from the estate of philanthropist George D. Cornell. "In the current capital market it has been challenging to find asset classes in which to invest these new funds," said Herbst. "We do not wish to time the market, but we do want the new funds to generate the best returns possible. The College has opportunistically invested these funds, guided by its target asset allocation."
Several years ago Rollins engaged Hammond Associates to serve as the College's independent investment advisor. The firm led College staff and trustees through a process to clarify and quantify the long-term objective of the endowment, and to evaluate the existing traditional asset allocation.
"We determined that the existing asset allocation was not likely to produce an average 9 percent return to meet the spending, to account for inflation, and to produce a small measure of unencumbered growth," said George Herbst, vice president and treasurer. "As a result, a more diversified asset allocation was adopted. This included the College's first venture into alternative investments, an asset class that includes hedge funds and private equity. We also decided to utilize index funds for our allocation to large and mid-cap U.S. stocks."
The magnitude of this change in strategy resulted in the replacement of most of the existing investment managers. The College's current asset allocation is: 22 percent Large/Mid US Stocks, 8 percent Small US Stocks, 25 percent Non-US Stocks, 20 percent Fixed Income (including 7 percent TIPS), 25 percent Alternative Assets (REITs/Real Assets, Private Equity & Absolute Return)
Rollins recently received a $93.3 million bequest from the estate of philanthropist George D. Cornell. "In the current capital market it has been challenging to find asset classes in which to invest these new funds," said Herbst. "We do not wish to time the market, but we do want the new funds to generate the best returns possible. The College has opportunistically invested these funds, guided by its target asset allocation."