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Endowment shows strong return on investments

by Jennifer Huber - October 9, 2006

The University of Connecticut Foundation reported a robust $32 million return on endowment investments in fiscal year 2006, growing the endowment to nearly $300 million.

The return showed a significant 10 percent increase over 2005, despite a turbulent year for financial markets - with sharp increases in oil and natural gas prices, inflationary pressures, interest rate hikes, and natural disasters, such as hurricanes Katrina and Rita.

Through favorable investment returns and solid fund-raising results, the Foundation was able to make a record $50.5 million available to the University during fiscal year '06 for scholarships, fellowships, faculty support, and programs.

"Both strong investment management and fund-raising programs are important in growing the endowment, and thereby maximizing support to the University," says Kevin Edwards, assistant vice president for treasury services at the Foundation.

The results are a reflection of the Foundation's strong infrastructure for managing assets, Edwards says.

The Board of Directors provides the framework by which the Investment Committee makes strategic investment decisions to maximize returns while minimizing risk, in order to ensure that the Foundation achieves both its short- and long-term goals.

The committee includes senior investment professionals, many of whom are alumni, and is supported by professional in-house staff and an outside investment consultant.

One way the Foundation has been able to minimize the effect of fluctuations in markets is by diversifying its portfolio.

This helps ensure reasonably consistent returns from year to year, which is critical because it enables the University to budget for pivotal programs supported by the endowment, such as research expenses, professorships, and scholarships.

The endowment plays a direct role in achieving the University's long-term academic and research goals.

Named the 27th public university in the country by U.S. News & World Report, UConn is committed to improving its national ranking.

In order to be competitive on the national stage, the University needs to build up an endowment comparable to those of the other top 30 public institutions.

"While performance has been good, the endowment needs to continue growing," says Edwards, "in order to properly support a University that has high aspirations of attracting renowned faculty and high-achieving students while maintaining its affordability. The University's success in these endeavors has a tremendous effect on the state."

The endowment has shown a remarkable 52 percent growth in the past four years, Edwards notes, adding that "increased support through the endowment will help enable Connecticut's flagship public university to continue moving forward in its campaign to expand and enhance educational and research programs at all of its campuses."

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