<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published December 1, 2008
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Varsity endowment funds weather market storm
NUS, NTU, SMU shielded somewhat since not all funds committed; academic programmes won't suffer
By SIOW LI SEN
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) Singapore's university endowment funds - not surprisingly - are struggling to cope with the financial meltdown.
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</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>Still, the damage is not too bad because endowment investing here is a relatively recent development - not all funds have been committed, which has provided some protection from the financial turmoil.
The National University of Singapore (NUS), Nanyang Technological University (NTU) and Singapore Management University (SMU) have also said there will be little impact on their academic programmes and that no student will suffer due to financial constraints.
This is unlike in the United States, where Harvard University warned recently of spending cuts because the economic slowdown could reduce government funding and eat into the school's substantial endowment.
Harvard's endowment fund - the biggest among US universities, and which meets about a third of operating costs - posted an 8.6 per cent return and grew to US$36.9 billion in the fiscal year ended June 30. But the university lost 12.7 per cent on its US stock portfolio and 12.1 per cent on its foreign equity portfolio during that time. The previous year's return was 23 per cent.
<TABLE cellSpacing=0 cellPadding=5 align=left border=0><TBODY><TR><TD bgColor=#ffffff>[FONT=Geneva, Helvetica, Verdana, Arial, sans-serif]<!-- REPLACE EVERYTHING IN CAPITALS WITH YOUR OWN VALUES --><TABLE class=quoteBox cellSpacing=0 cellPadding=0 width=144 align=left border=0><TBODY><TR><TD vAlign=bottom>
</TD></TR><TR><TD bgColor=#fffff1><TABLE cellSpacing=0 cellPadding=0 width=124 align=center border=0><TBODY><TR><TD vAlign=top>This is unlike in the US, where Harvard University warned recently of spending cuts because the economic slowdown could reduce government funding and eat into the school's substantial endowment.
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</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>Among the local universities, only SMU has given a glimpse of how recent months have been shaping up for endowment funds here. Its $436 million endowment fund took a $12.4 million hit, resulting in a net loss of $1.4 million for the year ended March 31, 2008.
The $12.4 million loss is mainly a mark-to-market or paper loss, said chief investment officer Teo Jwee Liang. SMU's general fund also took a mark-to-market loss of $10.8 million, with a net loss of $2.9 million.
Mr Teo said the net loss of $1.4 million against the endowment fund of $436 million equates to only 0.3 per cent of assets.
He added that the first six months of FY 2008-09 have been a challenging period for most investors.
'It is inevitable for portfolios to be negatively impacted by the market meltdown,' Mr Teo said. But given the well-diversified portfolio, he was confident of riding the current environment and being positioned for recovery later.
NUS's endowment investing also takes a very long-term perspective. 'Periods of negative return over the course of economic cycles have to be expected,' a spokesman said.
The NUS endowment fund of $1.3 billion is the biggest among the three universities here. It has engaged external investment managers and also puts money into hedge funds and private equity funds. 'We are currently overweight in cash and fixed-income relative to our long-term targets,' a spokesman said.
Core education, research and student financial assistance will not be significantly affected by lower returns from investments due to the financial downturn, the spokesman said.
=> In other words, still affected lah!
NTU's endowment fund was slightly more than $900 million in March this year.
In line with NTU's long- term policy to invest in diversified and uncorrelated asset classes, there was some reallocation of funds from fixed-income to other asset classes in FY 2006, a spokeswoman said.
For the year ended March 31, 2007, NTU's profit on investment for its endowment fund dropped sharply to $46.2 million, from $92.7 million.
'The lower profit on investments in FY 2006 (ended March 2007)
=> In other words, LOST $50M lah!
compared with the previous year reflected lower returns on financial assets,' the NTU spokeswoman said. As a reference, the return on global equities in Sing dollar terms, based on the MSCI World Index, was 8.8 per cent for the year ended March 2007 compared with 16.1 per cent the year before.
Target Asset Management chief executive Teng Ngiek Lian said times have been tough for fund managers. 'The multi-failures caught many by surprise, with so many asset classes caving in at the same time,' said Mr Teng, who manages money for many universities. [/FONT]
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Varsity endowment funds weather market storm
NUS, NTU, SMU shielded somewhat since not all funds committed; academic programmes won't suffer
By SIOW LI SEN
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) Singapore's university endowment funds - not surprisingly - are struggling to cope with the financial meltdown. <TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>Still, the damage is not too bad because endowment investing here is a relatively recent development - not all funds have been committed, which has provided some protection from the financial turmoil.The National University of Singapore (NUS), Nanyang Technological University (NTU) and Singapore Management University (SMU) have also said there will be little impact on their academic programmes and that no student will suffer due to financial constraints.
This is unlike in the United States, where Harvard University warned recently of spending cuts because the economic slowdown could reduce government funding and eat into the school's substantial endowment.
Harvard's endowment fund - the biggest among US universities, and which meets about a third of operating costs - posted an 8.6 per cent return and grew to US$36.9 billion in the fiscal year ended June 30. But the university lost 12.7 per cent on its US stock portfolio and 12.1 per cent on its foreign equity portfolio during that time. The previous year's return was 23 per cent.
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The $12.4 million loss is mainly a mark-to-market or paper loss, said chief investment officer Teo Jwee Liang. SMU's general fund also took a mark-to-market loss of $10.8 million, with a net loss of $2.9 million.
Mr Teo said the net loss of $1.4 million against the endowment fund of $436 million equates to only 0.3 per cent of assets.
He added that the first six months of FY 2008-09 have been a challenging period for most investors.
'It is inevitable for portfolios to be negatively impacted by the market meltdown,' Mr Teo said. But given the well-diversified portfolio, he was confident of riding the current environment and being positioned for recovery later.
NUS's endowment investing also takes a very long-term perspective. 'Periods of negative return over the course of economic cycles have to be expected,' a spokesman said.
The NUS endowment fund of $1.3 billion is the biggest among the three universities here. It has engaged external investment managers and also puts money into hedge funds and private equity funds. 'We are currently overweight in cash and fixed-income relative to our long-term targets,' a spokesman said.
Core education, research and student financial assistance will not be significantly affected by lower returns from investments due to the financial downturn, the spokesman said.
=> In other words, still affected lah!
NTU's endowment fund was slightly more than $900 million in March this year.
In line with NTU's long- term policy to invest in diversified and uncorrelated asset classes, there was some reallocation of funds from fixed-income to other asset classes in FY 2006, a spokeswoman said.
For the year ended March 31, 2007, NTU's profit on investment for its endowment fund dropped sharply to $46.2 million, from $92.7 million.
'The lower profit on investments in FY 2006 (ended March 2007)
=> In other words, LOST $50M lah!
compared with the previous year reflected lower returns on financial assets,' the NTU spokeswoman said. As a reference, the return on global equities in Sing dollar terms, based on the MSCI World Index, was 8.8 per cent for the year ended March 2007 compared with 16.1 per cent the year before.
Target Asset Management chief executive Teng Ngiek Lian said times have been tough for fund managers. 'The multi-failures caught many by surprise, with so many asset classes caving in at the same time,' said Mr Teng, who manages money for many universities. [/FONT]
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