University of Michigan endowment dips to $7.7B in fiscal 2012

On June 30 the endowment was valued at $7.7 billion, compared to $7.8 billion during the same time last year.

Meanwhile distributions from the endowment grew by $4 million. Distributions totaled $270 million in fiscal 2012, compared with $266 million in fiscal 2011. The $4 million increase marks the ninth year in a row that endowment distributions have risen.

Endowment distributions are capped at 4.5 percent of the endowment value, averaged over a seven-year period. The distributions support university programs, professorships and scholarships.

Investment returns for the endowment lowered. Returns during fiscal 2012 averaged -0.5 percent, lower than the 24.3 percent investment return reported the previous year. Officials cautioned that years of high rates of return are often followed by periods of low return.The ten-year return average is 9.6 percent.

Erik Lundberg, the university's chief investment officer, said he was disappointed with the year-end results, but not surprised.

"While an occasional loss from year to year is to be expected, the small loss last year is disappointing even though the endowment's investment return last year exceeded that of the average college and university endowment," said Lundberg.

Since 1999, the school's endowment has increased by $5.2 billion.

This article has been corrected to reflect that endowment returns were -0.5 percent in fiscal 2012.