Conservative investment strategy protected the Aalto University Endowment in the challenging investment environment of 2011
20.01.2012
Aalto University investment strategy emphasized securing the capital of the endowment during the first years of operations.
In the end of 2011, 19% of the endowment was invested in equity mutual funds and 81% in fixed income and money market. The year-end weight of the money market investments increased in December, as the university received the final part of the government capitalization.
Total return of the endowment was -0,7% in 2011, while the return of the benchmark set for the endowment was -1,8%. Return from equity investments was -9,4% and from fixed income and money market investments +2,5%. Since the implementation of the investment strategy in May 2010, the return of the endowment was +1,4%. Return of the benchmark was +0,2% during the same period.
Aalto University fundraising campaign ended in June 2011 and reached the goal of 200 million euros set for private donations. The last part of the government capitalization was received in December 2011 and hence the total value of the endowment reached 819 million euros at the end of 2011.
The uncertainty in the financial markets is expected to continue in early 2012. Therefore the endowment strategy for 2012 will remain conservative. The return target and equity weight of the portfolio will be moderately increased in line with the long term targets.
Aalto University will report its endowment more thoroughly in the Board Annual Report 2011, which will be published in March-April 2012.
The purpose of the Aalto University Endowment is to generate additional funding for world class research and education. The endowment provides the university with greater financial independence and enhances its ability to direct resources to strategic focus areas.
The returns from the endowment are expected to cover 6 to 8 percent of the university 400 million euro annual operative budget
Additional information: CFO Marianna Bom, Aalto University, +358 50 575 3762, marianna.bom [at] aalto [dot] fi.
