PROVIDENCE, R.I. [Brown University] — Buoyed by strong performance from global stock markets, Brown University’s endowment produced a 13.4 percent return for the fiscal year that ended on June 30, 2017, closing the period with a value of $3.5 billion.
Over the course of Fiscal Year 2017 — July 1, 2016, to June 30, 2017 — the endowment distributed $179 million to the University’s operating budget, supporting student financial aid, professorships, academic programs, teaching and research, among many other strategic University priorities. In total, the distribution represents approximately $19,000 per student and 18 percent of Brown’s operating budget.
“From providing scholarships to low- and moderate-income undergraduates to funding cutting-edge research by world-class faculty and graduate students, contributions from the endowment are vital in advancing Brown’s strategic priorities,” said Barbara Chernow, executive vice president for finance and administration. “At the same time, prudent management with a focus on preserving the endowment’s long-term strength ensures that Brown can continue to offer future students the same opportunities for learning, research and discovery that students enjoy today.”
Brown’s 13.4 percent return exceeded both the preliminary return of its benchmark portfolio (11.1 percent) and Cambridge Associates’ preliminary mean and median returns for colleges and universities (12.9 percent). Since 2012, the endowment has grown from $2.6 billion to $3.5 billion, producing more than $1.3 billion in investment returns and contributing more than $800 million to support Brown’s operating budget.
Chernow noted that the endowment is essential to the University’s commitment to ensuring that no student who aspires to attend Brown will encounter cost as a barrier. With the endowment contributing a significant portion of the financial aid budget on an annual basis — 35 percent for FY17 — Brown meets the full demonstrated financial need of all students. For the Class of 2021 (this fall’s incoming class at Brown), 43 percent of students received need-based scholarships with an average award of $44,224.
Given the endowment’s purpose — to provide financial stability and support in perpetuity to the University’s educational mission and to contribute to the academic endeavors of both current and future students — Brown’s Investment Office manages the endowment with a dual mandate to protect and prudently grow its value over the long term, Chernow noted. Guided by this mandate, the endowment is invested in a diverse set of asset classes and conservatively positioned to allow for multiple future macroeconomic scenarios.
Annualized returns for Brown’s endowment for three, five, 10 and 20 years are 5.8, 9.1, 5.2 and 8.6 percent, respectively.