According to the College investment office’s December endowment report, during the economic downturn Williams’ investment portfolio declined by 18.4 percent for the fiscal year ending June 30, 2009. That compares with a 19.9 percent median drop experienced by 146 peer colleges and universities studied by a leading investment advisor to endowments. Taking into account spending and gifts during that same period, the overall value of Williams’ endowment decreased from $1.8 billion to $1.4 billion.
Though the College’s holdings in domestic and international equities have taken “substantial hits,” says Collette Chilton, chief investment officer, “we had already reduced our exposure to U.S. equities and increased exposure to fixed-income and absolute return.” That combined with “low debt exposure mean that Williams hasn’t had to wrestle with liquidity issues that have unfortunately forced a few peer institutions to borrow at high rates or try to sell private investments at distressed prices.”
The College initially intended to spend $94 million from the endowment during fiscal year 2009 but adjusted its plan when the markets began to falter, spending only $81.3 million by June 30. This year spending has been reduced again to $79.2 million, or 5.6 percent of the endowment’s June 30 value. “That rate makes sense for now,” Chilton says, “to smooth out the effects of the current disruption—but we’ll need to get it back as soon as possible to a more sustainable level between 4.5 and 5 percent.”
To read the full endowment report, visit tinyurl.com/yk86op8. For an interview with Chilton in Giftwise, the College’s gift-planning newsletter, visit tinyurl.com/y8oj9cj.