Opinion Board | Paying Dividends

$6.6 billion. Wharton alum Donald Trump's fortune? Nope. Try the size of Penn's skyrocketing endowment.

At last Thursday's Board of Trustees meeting, Penn officials announced a 20.2 percent return - as compared last year's 12.5 percent return - on its endowment investments for the fiscal year that ended on June 30.

The endowment grew by $1.3 billion since last year, $990 million of which came from investment gains.

Led by Chief Investment Officer Kristin Gilbertson, Penn has benefited from a far more aggressive investment strategy over the past few years, marked by increased investment in hedge funds, private equities, real estate, natural resources, and especially international and emerging market equities.

According to Gilbertson, each of these asset classes earned at least 19 percent returns. Emerging market equities performed particularly well showing a jaw-dropping 42.2 percent return.

At a 20.2 percent return rate, Penn is right with its peer institutions which have reported (Harvard and Dartmouth) and could be ahead of many others - a welcome change for a University which has traditionally lagged the rest of the Ivy League in this area.

With Penn's ever-growing reputation as an elite institution, its relatively large student body, the imminent development of the Postal Lands and a financial-aid budget always in need of padding, the importance of an increasingly large endowment can't be overstated. Penn students are constantly clamoring for better programs, resources and facilities. This is where the money for improvements and innovations comes from.

We urge the administration to stay aggressive in their investments, and not lapse into the excessively cautious strategy which characterized Penn's approach in the more stagnant years of the 1990's.

With these kind of returns, we're not too worried.

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