The Western Foundation makes every effort to keep donors informed and maintain transparency of the funds we manage. Below are the links to our policies and results from our 2016 Annual Endowment Report.
Total Endowment Assets Under Management
For the calendar year ended December 31, 2016, total Endowment Assets Under Management grew by $4.0 million to $71.4 million. This is the first time the Endowment has exceeded $70.0 million in the history of the Foundation. Over the past five years, the endowment has grown by 47%, through generous gifts and prudent investment. Total Endowment Assets Under Management includes assets owned directly by the Foundation, as well as endowed assets managed by the Foundation on behalf of the University and the Northwest Indian College.
Endowment Fund Returns
The Endowment is invested in a mix of stocks, bonds, real estate and alternative investments designed to maximize returns while also mitigating downside risk. For the calendar year ended December 31, 2016, the fund achieved an overall investment return of 5.3%. Returns continued to be propelled by strong U.S. equity markets and reasonable fixed income returns. The last quarter of the calendar year, however, reflected a significant adjustment in fixed income valuation due to the pending threat of rising US interest rates.
Total Value of Gifts and Services Provided to the University
This chart reflects the value of all scholarships, program and faculty support provided to the University from all funding sources , including the endowment fund. Over the past five years, support to the University has grown by $2.1 million or 39%.
Commonfund Historical Average Returns
The WWU Foundation outsources its investment management to Commonfund who specializes in creating investment solutions for non-profit clients. Commonfund itself is a non-profit, established in 1971 with a grant from the Ford Foundation. Commonfund’s mission is two-fold. First, to create investment solutions for nonprofits that cannot access top managers and strategies directly due to their size. Second, Commonfund creates educational programs that teach clients about best practices in institutional investing and governance. Commonfund has provided investment management and advice to the Foundation for more than 25 years.
For the year ended December 31, 2016, the portion of the WWU Foundation Endowment Portfolio managed by Commonfund returned a total of 5.4%, trailing the policy benchmark of 7.3% for the same period. The underperformance for the year was mainly the result of investors shifting from traditional fixed income investments into stocks with sizable dividend yields as a replacement for low fixed income yields. Many active managers did not anticipate the rapid shift into these types of equities and thus underperformed against their benchmark. However, many of these fixed income investments have since recovered following the U.S. Presidential election in November.
For 2017, Commonfund has positioned the Portfolio to remain overweight in U.S. and Japanese equities compared to its equity positions in Europe and emerging markets. Furthermore, in an effort to increase returns beyond the standard liquid markets, the Foundation has made a commitment to invest up to 10% of its portfolio in private equity, venture capital and direct lending. These strategies are more illiquid in nature, and thus are intended to return a premium over standard investment options to compensate for this illiquidity.
Mark Brovak, Senior Director and Chief Operations Officer
Mark is here to answer questions about Western Foundation investments at (360) 650-4283 or email@example.com.