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The annual endowment survey is out and Old Dominion has now increased its endowment to over $213,000,000.00 Million. We have outperformed 60% of the Universities in the US and in Canada with an annual growth rate of 18.4%. Using the 18.4 % growth rate ODU will reach approximately ½ Billion Dollars in just 5 years and approximately 1 Billion Dollars in 9 years. After 9 years our endowment will start to grow at a rate of $200,000,000 plus for future years and with compounding rates the numbers are dramatic.

2014 - $218,687,000 = Current Endowment
2015 - $253,005,000
2016 - $299,557,000
2017 - $354,675,000
2018 - $419,935,000
2019 - $497,203,000
2020 - $588,688,000
2021 - $697,004,000
2022 - $825,252,000
2023 - $977,098,000

Just as a reference if we have an annual return of 18.4% growth the endowment will double approximately every 5 years reaching $2 Billion in 2028 and over $4 Billion by 2032.

Old Dominion University is ranked #288 out of 835 Institutions listed. ODU's 2014 FY was $213,687 up from the 2013 FY of $180,434 with a yearly growth rate for 2014 of 18.4%
After reviewing the rate of return for the top 10 Schools in VA ODU's rate of return is outpacing every school with the exception of VA Tech and VMI.

FYI Virginia's Top 15 Endowments
1). UVA # 18 return 15.1%
2). U of R #35 return 14.3%
3). VCU # 60 return 13.8%
4). Washington and Lee # 63 return 9.9%
5). W&M # 114 return 14.3%
6). VA Tech # 115 return 20.6%
7). VMI # 197 return 22.2%
8). Hampton # 242 return 13.5%
9). ODU # 288 return 18.4%
10). Hollins # 320 return 8.4%
11). Randolph College # 342
12.). Hampden-Sydney # 361
13). Randolph-Macon # 366
14). Roanoke College # 396
15). Lynchburg College # 455

The average return in 2014 was 15%
Median of all Endowments FY 2014 -$112,967 / FY 2013 ,$127

CUSA Schools Ranks
1). Rice rank #30 $5,527 B
2). UAB rank T#227 $327 M http://en.wikipedia.org/wiki/University_...Birmingham
3). ODU rank #288 $213 M
4). Florida Atlantic rank #294 $208 M
5). Florida International rank #333 $ 176 M
6). North Texas rank #371 $143 M
7). UTEP rank T#351 $151 M http://en.wikipedia.org/wiki/University_...at_El_Paso
8). Charlotte rank #341 $168 M
9). Western Kentucky rank #390 $135 M
10). UTSA rank T#424 $113 M http://en.wikipedia.org/wiki/University_...an_Antonio
11). Marshall rank # 435 $108 M
12). LA Tech rank T#362 $94 M http://en.wikipedia.org/wiki/Louisiana_Tech_University
13). Middle Tennessee rank #483 $88 M
14). Southern Miss rank #515 $78 M

http://www.nacubo.org/Documents/Endowmen...Values.pdf

Fantastic! Great find!

I applied the same logic when I bought my first house in 2005

Yea, you just keep assuming returns of 18+% continue.

Also, larger endowments (UR/UVA for example) typically have lower returns in years where equities out perform. This is because they are large enough to be fully diversified across all asset classes and domiciles.

The best metric for endowment return is a 10 yr annualized return. ODU annualized at 6.8%. You want to be b/t 6/7% to meet spending policy and inflation.

The big boys (over 1 billion) will want annualize closer to 10%. UR and UVA are both top 15 in the nation at the 10 yr numbers, doubling their endowment assets since 2004 despite 2007-2009.

(01-30-2015 10:41 AM)JMU2004 Wrote:  Yea, you just keep assuming returns of 18+% continue.

Also, larger endowments (UR/UVA for example) typically have lower returns in years where equities out perform. This is because they are large enough to be fully diversified across all asset classes and domiciles.

The best metric for endowment return is a 10 yr annualized return. ODU annualized at 6.8%. You want to be b/t 6/7% to meet spending policy and inflation.

The big boys (over 1 billion) will want annualize closer to 10%. UR and UVA are both top 15 in the nation at the 10 yr numbers, doubling their endowment assets since 2004 despite 2007-2009.

To be fair oldtimer did say "just as a reference" when extrapolating the 18% figure.

(01-30-2015 11:09 AM)paintedblue2 Wrote:  

(01-30-2015 10:41 AM)JMU2004 Wrote:  Yea, you just keep assuming returns of 18+% continue.

Also, larger endowments (UR/UVA for example) typically have lower returns in years where equities out perform. This is because they are large enough to be fully diversified across all asset classes and domiciles.

The best metric for endowment return is a 10 yr annualized return. ODU annualized at 6.8%. You want to be b/t 6/7% to meet spending policy and inflation.

The big boys (over 1 billion) will want annualize closer to 10%. UR and UVA are both top 15 in the nation at the 10 yr numbers, doubling their endowment assets since 2004 despite 2007-2009.

To be fair oldtimer did say "just as a reference" when extrapolating the 18% figure.

Yea, but it is entirely unrealistic, and the rest of the post is based on it.

Anyway, congrats on a good year. Your 1, 3, and 10 yr returns are better than JMU...we outstrip you only in a 5yr number.

(01-30-2015 11:20 AM)JMU2004 Wrote:  

(01-30-2015 11:09 AM)paintedblue2 Wrote:  

(01-30-2015 10:41 AM)JMU2004 Wrote:  Yea, you just keep assuming returns of 18+% continue.

Also, larger endowments (UR/UVA for example) typically have lower returns in years where equities out perform. This is because they are large enough to be fully diversified across all asset classes and domiciles.

The best metric for endowment return is a 10 yr annualized return. ODU annualized at 6.8%. You want to be b/t 6/7% to meet spending policy and inflation.

The big boys (over 1 billion) will want annualize closer to 10%. UR and UVA are both top 15 in the nation at the 10 yr numbers, doubling their endowment assets since 2004 despite 2007-2009.

To be fair oldtimer did say "just as a reference" when extrapolating the 18% figure.

Yea, but it is entirely unrealistic, and the rest of the post is based on it.

Anyway, congrats on a good year. Your 1, 3, and 10 yr returns are better than JMU...we outstrip you only in a 5yr number.

I realize the 18.4% is unrealistic to expect long term but.......... It is possible for Old Dominion to see average returns of 10% on their managed endowment portfolio funds (cash) along with the ODUREF/REO/REIT portion of ODU’s endowment growth assets. ODU is no longer focused on capital preservation but has created a REF/REIT for growth portfolio investing that includes asset ownership and retention (*REO). It is a reasonable assumption that Old Dominion may yield long term returns with an average of 10%, barring another real estate crash. If Hampton Roads Real Estate market remains strong and there is modest National and Regional economic growth, it is possible for ODU’s endowment to double every 10 -12 years.

I hope the US economy will see a 5 - 7 year positive growth cycle. If however the economy were to see a repeat of @ 2003-2004 or 2011 - 2012 it will be devastating to ODU’s endowment, primarily because of our large Real Estate Foundation Investments (Holdings). ODU has now begun to reduce leveraged debt service.

@i]2004 -24.9%
2012 -1.2%[/i]

Old Dominion is in a very unique situation with our real estate foundation, with modest appreciation and as the debt service is reduced or paid off during the next 20 years Old Dominion will be in a position to see record growth. Because of creative quasi private/government partnership Investing ODU was able to diversify with multiple endowment growth avenues. I am sure there have been lessons learned and ODU is now in a position to earn ROR investment dollars because they own the Real Estate with dramatically reducing debt service as we move into the future. *ODU's Village Apartments, Shops, Restaurants, Hotels and other real estate owned investments along with managed entertainment venue returns from the TED will all increase ODU's endowment. The Universities Real Estate Foundation puts ODU in unique position because of the Quasi Private/State Government Partnership as opposed to land grant holdings only.

ODU Real Estate Foundation

Exempt Organization Status Unconditional Exemption
12/2012

Asset Amount $90,707,396
Amount of Income $8,153,354
Revenue Amount $6,637,664


Read more: http://www.faqs.org/tax-exempt/VA/Old-Do...z3QLIs1UyS

The Old Dominion University Real Estate Foundation is a nonprofit 501©(3) corporation chartered in 1994 to receive, acquire and manage gifts of real property for the benefit of the University. The Foundation manages a number of properties near the Norfolk campus and the Virginia Beach Higher Education Center, as well as the development of the University Village. The Foundation is governed by a Board of Trustees consisting of alumni and friends of the University

Good stuff, thanks for the info, OT.

I think that some may be confusing terms here. Rate of return represents the gain in value on the existing principal. What the report shows is the total growth in the endowment (the sum of gain on investments plus new donations minus expenditures).

(01-30-2015 08:35 PM)The Doctor Is In Wrote:  I think that some may be confusing terms here. Rate of return represents the gain in value on the existing principal. What the report shows is the total growth in the endowment (the sum of gain on investments plus new donations minus expenditures).

No confusion, the report that is referenced in my post is the ODU Real Estate Foundation report. The foundation was formed in 2004 and is a dedicated growth vehicle that was created for one purpose. It was formed to be a major contributor to grow ODU's endowment through asset income or the eventual profit from liquidation of said assets. The Holdings or appraised value of assets is not included in endowment dollars. The Real Estate is owned by the foundation under the umbrella of the University. If the asset is sold than at that time the profit from the sale would be added to the endowment. Otherwise only the net income each year is included.

The Endowment is a giant tree made up of many branches of asset or investment portals for growth. As ODU received and accumulated funds from a mix of many sources to grow our endowment we were fortunate that a very savvy group of “Alumni and Friends of the university” decided to create the ODU RE Foundation. This would allow the endowment to expand potential income growth with many more options for investments. We certainly didn’t reinvent the wheel; we simply followed the lead of some very successful schools that have done this for many years and now have endowment dollars in the billions.

The formation of the RE Foundation opens up asset management to a whole new level. Before the formation of the “REF” assets were confined to specified boundaries “Stock Investments and Options”. All income accumulation was subject primarily to the ups and downs of stocks, bonds and commodity investments. Now along with the aforementioned sources we have so many more options for private RE donations, income from EER (Entertainment Event Revenue) sources from the TED (NO Athletic Events). We now can convert annuitized income that is accumulated from “Private Estate” donations so it can be directed into other income building sources. In the past that type of donation would most likely be liquidated so funds could be invested to accumulate endowment income. Now it can become a holding of the RE Foundation. There are a few other income generators but hardly significant. Donations and “all income sources” can now be reallocated into selected potential growth targets. Income from REF is invested into diversified families of stocks, bonds, commodities and other growth avenues or it can be invested into the RE Foundation. ODU’s Endowment is headed in the right direction and growing as we move forward.

Edit... Our RE Foundation is in its infancy, it is only 10 years old.

Just trying to understand your post. The footnotes to the table indicate that the Real Estate Foundation numbers are included in the total market value of all investments contained in our endowment. That would indicate that the authors used the present value of our real estate holdings in their research. The notes at the beginning of the table indicate that the percentages shown are not to be viewed as a rate of return on investment. Two important, but separate, growth measures.