Georgetown University Chief Financial Officer Christopher Joyce discussed plans for Georgetown’s endowment’s growth and its role in financing the University in the ICC Auditorium last night. Joyce walked approximately 40 students through the structure of the endowment using PowerPoint slides of graphs and charts.
With approximately $650 million in assets, Georgetown’s endowment is well below that of most top private institutions, Joyce said. Harvard, for example, has an endowment that tops $19 billion.
“When you look at our endowment compared with the giants we compete with, we’re a dwarf,” said Joyce, who stressed that makes the need to use the University’s endowment productively all the more urgent.
The endowment, a pool of invested money used to fund University operations, has grown considerably since 1982, when it was approximately $80 million. Every year, the University spends some of the funds earned by the endowment on operating costs and programs. Over time, the endowment grows through gifts and unspent income. This year, Georgetown spent $33 million from the endowment, said Joyce.
The endowment is managed by the Investment Committee, which meets once every quarter to review the endowment’s performance. According to Joyce, the committee is currently discussing how to reallocate some of the University’s investments. The endowment is heavily invested in public equities, a strategy that has cost the University millions of dollars over the past few years. Many other schools have a higher proportion of their assets invested in hedge funds, high-return oriented funds intended for wealthy investors and institutions. The investment committee plans to move a larger proportion of Georgetown’s endowment into these funds, while shifting money out of public equities.
Joyce noted that the investment committee would not try to pick the perfect moment to make their planned adjustments, and would instead spread the changes out over time, describing the approach as a “migration path.”
The talk was sponsored by the Georgetown University Student Investment Fund, a student investing group.
