A Look at Fiscal Year 2023 Performance and Strategic Investment Management
Colorado College experienced robust financial growth in its endowment during the fiscal year ending June 30, 2023, demonstrating the effectiveness of its investment strategies and the crucial role of Partners Capital Investment Group. Thanks to the generosity of donors and prudent financial stewardship, the college’s endowment portfolio achieved a significant 10.5% net annual return. This positive performance underscores the college’s commitment to securing long-term financial health and supporting its mission of providing an exceptional liberal arts education.
Over the past decade, Colorado College’s endowment has consistently delivered strong results, averaging an impressive 8.3% annual return. This long-term performance not only surpasses a standard 70% equity/30% fixed income benchmark, which recorded 8% for one year and 7.4% over ten years, but also positions Colorado College favorably among its peers. The strategic partnership with Partners Capital Investment Group has been instrumental in achieving these commendable returns.
Sustaining Growth and Supporting the College Budget
The college’s endowment payout policy is carefully designed to balance current needs with future growth. Currently, Colorado College provides an annual payout of 5% of each endowment’s calculated value, with a minor 5% surcharge for management and associated expenses. This approach ensures a consistent stream of funding for the college while preserving the endowment’s inflation-adjusted market value. By the close of the last fiscal year, the combined market value of the endowment and perpetual trusts reached $918 million, generating a substantial payout of $40.5 million. This endowment payout, coupled with annual operating gifts, contributed significantly, accounting for 19% of Colorado College’s annual operating budget.
Comparative Endowment Performance Data
To further illustrate the strength of Colorado College’s endowment management, comparative data highlights its competitive position.
| Timeline | Colorado College as of June 30, 2023 | 70/30 Benchmark (MSCI World AC NR LC/Barclays US 5-10 Year Treasury TR) |
|---|---|---|
| 1 Year | 10.5% | 8.0% |
| 3 Years | 9.2% | 6.7% |
| 5 Years | 7.8% | 6.7% |
| 10 Years | 8.3% | 7.4% |
These figures demonstrate Colorado College’s robust performance relative to market benchmarks over various timeframes, reflecting effective investment strategies implemented in partnership with Partners Capital Investment Group.
Benchmarking Against Peer Institutions
When examining average annual rates of return for U.S. colleges and universities, Colorado College’s endowment performance remains strong. While institutions with endowments exceeding $1 billion reported slightly higher 10-year returns, Colorado College, falling within the $501 million to $1 billion* endowment group, demonstrates competitive returns.
| Endowment Amount | 10 Year |
|---|---|
| > $1 Billion | 8.91% |
| $501 Million-$1 Billion* | 7.93% |
| $250-$500 Million | 7.56% |
| $101-$250 Million | 7.83% |
| $51-$100 Million | 6.89% |
| $25-$50 Million | 7.14% |
| 7.05% |
*Colorado College’s endowment is in this group. Source: National Association of College and University Business Officers (NACUBO) 2022 Survey
Strategic Asset Allocation
Colorado College employs a diversified asset allocation strategy to optimize returns and manage risk. This approach, guided by the expertise of Partners Capital Investment Group and the college’s Board of Trustees Committee on Investments, includes investments across various asset classes:
- Global Equities: 44%
- Private Equity: 17%
- Absolute Return: 13%
- Hedged Equities: 8%
- Private Debt: 7%
- Fixed Income: 5%
- Cash: 4%
- Private Equity Real Estate: 2%
This diversified portfolio is meticulously managed to ensure long-term growth and stability, aligning with the college’s financial objectives.
Oversight and Management by Partners Capital Investment Group
The Colorado College Board of Trustees Committee on Investments provides diligent oversight of the endowment, adhering to college policy, the Unified Prudent Management of Institutional Funds Act, and established rules of prudence. In pursuit of superior investment returns, the committee strategically partners with outsourced CIO Partners Capital Investment Group. This collaboration allows for access to sophisticated investment strategies and professional management. Partners Capital Investment Group plays a crucial role in monitoring the 62 external investment firms entrusted with managing the college’s assets, ensuring alignment with the college’s financial goals and risk tolerance.
Endowment Spending and Priorities
The spendable income generated from the endowment is calculated using a policy set by the Board of Trustees, balancing present needs with future financial sustainability. The current spending rate is set at five percent of a 12-quarter trailing average market value, with annual changes capped to ensure predictability. After a small surcharge for endowment management, the remaining funds are strategically allocated to key areas supporting Colorado College’s academic and institutional priorities. In fiscal year 2023, endowment spending was allocated as follows:
- Financial Aid: 50%
- Academic Departments: 24%
- Library: 13%
- General Budget Support: 7%
- Professorships: 6%
Endowment Per Student: A Comparison
Endowment per student is a key metric reflecting an institution’s financial capacity to support its students. While peer institutions like Bowdoin and Hamilton College boast higher endowment per student figures, Colorado College maintains a competitive position.
| College | Endowment Per Student* | Overall Endowment in Millions** |
|---|---|---|
| Bowdoin College | $1,269,647 | $2,475 |
| Hamilton College | $622,529 | $1,276 |
| Davidson College | $667,026 | $1,316 |
| Whitman College | $440,501 | $684 |
| Carleton College | $535,077 | $1,094 |
| Colby College | $496,221 | $1,122 |
| Wesleyan University | $431,654 | $1,485 |
| Middlebury College | $421,248 | $1,467 |
| Macalester College | $374,258 | $830 |
| Colorado College | $370,356 | $823 |
| Lafayette College | $369,089 | $1,001 |
| Colgate University | $379,048 | $1,197 |
| Kenyon College | $276,326 | $517 |
| Bates College | $229,843 | $419 |
| College of the Holy Cross | $316,325 | $993 |
| Pitzer College | Not included in 2022 NACUBO survey |
*The endowment per student is the overall endowment as reported by the National Association of College and University Business Officers (NACUBO), divided by the number of undergraduates cited in the Common Data Set. **Source: NACUBO 2022 Survey
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Looking Ahead
Colorado College’s strong endowment performance in fiscal year 2023, bolstered by the strategic partnership with Partners Capital Investment Group, positions the college for continued success. The prudent management and diversified investment strategy ensure the endowment remains a vital resource, supporting the college’s academic mission and providing opportunities for students for generations to come. The college expresses its gratitude to its generous donors and remains committed to responsible stewardship of these crucial funds.
