Two new articles in the Cornell Daily Sun just came out dealing with the 2009 performance of the Cornell University Endowment:

• C.U. Investment Performance Rises By 6.2 Percent
• C.U. Endowment Begins Climb From 2008 Depths

Joanne DeStefano, vice president for finance and CFO of the University, is quoted: “We earned 2 percent on our endowment from January through June 2009.” The endowment suffered a 27% loss in the second half of 2008, as global markets crashed and the US entered a recession. Unfortunately, the Cornell endowment website has not yet published its June quartly report.

The S&P500 index is +2% for the January to June period, which makes Cornell’s 2% performance an interesting match. The S&P500 is up another 16% from July through the present: I will be interested to see how Cornell’s endowment performs in the second half.

The University has set very low expectations for future growth of the endowment:

“The ultimate goal of the endowment is to generate sufficient returns to grow the real value of the endowment while meeting annual operating budget pay-out with an annual five percent pay-out growth,” DeStefano said. “This translates to a minimum return target of CPI plus 5 percent.”

At a 5% rate (not including any pay-outs), it will take Cornell at least 7 years before the endowment is back to the level-water line. However, if Cornell can earn 14% a year, it might only take them 5 years.