March 17, 2000
University of Maryland Endowments Show Best Performance in Nation Funds Top
National Average on Investment Returns by 18 Percentage Points
The combined endowments of the University of Maryland Foundation (UMF) and
the University System of Maryland's Common Trust showed the best market
performance of any endowment in American higher education, based on the
results of an annual survey conducted recently by the National Association
of College and University Business Officers (NACUBO).
The Common Trust and the University of Maryland Foundation (UMF) reported a
one-year combined investment return of 29.3 percent, as well as 29.3 percent
in the three-year, 25.7 percent in the five-year, and 18.8 percent in the
10-year categories for market returns. In all four categories, these
combined endowments' investment return was the highest of the 503
institutions in the report.
According to the NACUBO Endowment Study - which reports but does not rank
the investment performance of participating institutions - in FY1999 the
average investment return rate for colleges and universities participating
in the study was 11 percent, below last year's average return of 18 percent.
Individual endowment pool return rates ranged from a low of -15.8 percent to
the high of 29.3 percent reported by the UMF and the Common Trust.
The UMF is an affiliated foundation of the University System of Maryland. It
assists the 13 USM institutions in investing funds, and it holds and manages
funds. In recent years, several USM institutions pooled their endowments
with the UMF to receive a higher rate of return on their investments. The
Common Trust is a State of Maryland-endowed fund managed by the USM Board of
Regents. The Foundation and the Common Trust work cooperatively in the
management of endowment funds.
John K. Martin, president of the UMF, said, "The record-breaking period of
economic expansion has not only created significant wealth for individuals,
it has also provided enormous opportunities for higher education to build
endowment both to provide current support for faculty and students, and
funds to buttress the university during leaner economic periods. It is
staggering to realize that our endowment has grown 33 percent in one year.
But much more needs to be accomplished in building endowments for all public
The total endowment for all 13 USM institutions has grown from $60 million
in 1988 to $611 million today. Martin asserted that on its own, the
endowment of the USM's flagship institution, the University of Maryland,
College Park, should exceed that amount.
Discussing this unparalleled growth, Martin credited an outstanding
investment committee chaired by Charles W. Cole, Jr., a vice chairman of the
Legg Mason Trust Co. Members of the investment committee include several
major financial managers and corporate leaders.
The combined endowments of the USM and the UMF showed a one-year growth rate
of 33.2 percent, making them the third-fastest growing as well as top-ranked
in the category of total return. In comparison, the growth of the Maryland
endowments - ranked by NACUBO as the nation's 83rd largest - topped
endowments at Harvard (9.5 percent growth), Stanford (31.7), Duke (23.4) and
Ohio State (17) universities, according to Martin.
Donald N. Langenberg, chancellor of the University System of Maryland, said
the endowments' performance demonstrates the efficacy of combined investment
management, and reveals that the remarkable growth of the marketplace bodes
well for American higher education.
"In our System, the smallest institutional endowment has the same advantages
as the largest fund," Langenberg said. "This allows them to take full
advantage of these prosperous times."
The USM's Make a Lasting Impression Capital Campaign continues to grow
toward its goal of $700 million by 2002. As of the end of January, $522
million has been raised.