<p>With some global equity markets declining nearly 30 percent, Brown University’s endowment strategies provided some protection. The return on endowment declined 23.1 percent for fiscal year 2009.</p>

PROVIDENCE, R.I. [Brown University] — Brown University announced today that between July 1, 2008, and June 30, 2009 — fiscal year 2009 — the investment return for its endowment declined 23.1 percent.

Brown President Ruth J. Simmons reported at the year’s first faculty meeting that in a year where a broad measure of global equity markets (MSCI World) declined 29.5 percent and other equity asset classes fell substantially, Brown’s hedge fund and fixed income investments provided some protection.

During fiscal year 2009, the endowment paid out $132 million for operations, and Brown received $44 million in new endowment gifts. As a result, the market value of the endowment was down 26.6 percent from $2.778 billion at the start of the fiscal year (July 1, 2008) to an unaudited value of $2.038 billion at the end (June 30, 2009), a decline of $740 million.

“The fiscal year 2009 results tell only part of the story,” said Elizabeth Huidekoper, executive vice president for finance and administration. “During the full two years of the bear market, global equity markets fell 37.0 percent and the Standard & Poor’s 500 was down 35.9 percent, but the Brown endowment fell half that — 18.3 percent.”

Over the last five years, from July 1, 2004, to June 30, 2009, the endowment return has averaged 5.2 percent per year versus an MSCI World return of 0 percent. During the last 10 years, the University’s endowment return has averaged 7.2 percent annually, well above the MSCI World return of a negative 0.8 percent.

At June 30, 2009, the asset allocation of Brown’s endowment was 15 percent in public equity, 32 percent in hedged strategies, 17 percent in private equity, 12 percent in real assets, 9 percent in credit, 10 percent in treasuries, and 5 percent in cash.

In anticipation of the drop in assets, the University made more than $35 million in budget reductions for fiscal year 2010. Given its strong commitment to continued investment in faculty, financial aid, and facilities, the University expects to make additional budget reductions in other areas for fiscal year 2011. During the academic year that begins today (Wednesday, Sept. 9, 2009), the University community will be engaged in determining where and how those reductions might be achieved.