Stanford's Investment Loss May Be Largest Ever
It's not a surprise -- Stanford University president John Hennessy warned in April that the university's endowment would probably drop 30% this year due to the world economic crisis -- but a 25.9% plunge in Stanford's primary investment pool for 2008-09 is still daunting, even if the S&P 500 Index did drop a little more. (Stanford is comparing the 12 months ending June 30). As a result, Stanford has cut the payout on individual endowment funds by 10% for this fiscal year and another 15% for next year, making everybody take a two-year hit. ("Five years of reductions would be harmful to morale, especially after the external economy recovers," its 2010 budget plan notes. "A series of small cuts does not encourage strategic decisions.") The school also raised $1 billion in a bond offering last April in case of a "true emergency," Hennessy said.
