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I'm Envious of Liberty's Endowment
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Liberty Fan Offline
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Post: #31
RE: I'm Envious of Liberty's Endowment
Pretty fair and balanced article on Liberty. Endowment should be 3b by 2022.

http://baconsrebellion.com/liberty-university-rise/
05-17-2017 02:25 PM
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jacksfan29 Offline
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Post: #32
RE: I'm Envious of Liberty's Endowment
(05-17-2017 02:25 PM)Liberty Fan Wrote:  Pretty fair and balanced article on Liberty. Endowment should be 3b by 2022.

http://baconsrebellion.com/liberty-university-rise/

$150M in 2007 to $3B in 2022? Fifteen years? That type of growth screams trouble. My guess is Liberty crashes and burns within the next decade.
05-17-2017 03:32 PM
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SlyFox Offline
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Post: #33
RE: I'm Envious of Liberty's Endowment
Online ed has been that lucrative but the market is clearly correcting. We started in that arena back in the Mid '80s while I was in school and we were recording profs on VHS tapes. The technology of the past decade combined with our well-established experience in the space (and some outstanding marketing) put us in the right place at the right time. Now everyone is making a run at the obvious windfall from online ed including some of the top academic schools in the nation. We continue to ride the wave but know it won't last forever.

Part of the big jump was us choosing to move cash in the bank into the endowment. For years we chose to keep most of it liquid so we had more flexibility in how we spent the money. But now that we are nearly complete on a $1B renovation of campus over the past couple of years, we are moving more of the funds to longterm investments through endowment. It was the natural progression.

As for our academic standing, we have plenty of room for improvement. But part of the emphasis on spending has moved to developing our existing in newer programs like engineering and medical. Our turnover rate has always been high. Our school culture and rules are clearly not for everyone. Some folks don't recognize that until they have been on campus for a semester or two. We are working to improve those numbers and have risen in academic rankings the past few years as a result. We know we have plenty more work to do.
(This post was last modified: 05-17-2017 04:30 PM by SlyFox.)
05-17-2017 04:29 PM
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Captain Bearcat Offline
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Post: #34
RE: I'm Envious of Liberty's Endowment
(05-17-2017 04:29 PM)SlyFox Wrote:  Part of the big jump was us choosing to move cash in the bank into the endowment. For years we chose to keep most of it liquid so we had more flexibility in how we spent the money. But now that we are nearly complete on a $1B renovation of campus over the past couple of years, we are moving more of the funds to longterm investments through endowment. It was the natural progression.

They kept $927 million in a savings account? The CFO should be fired on the spot.

Endowments earn 4% right now. A big part of endowments are typically in treasury bills or low-risk stocks, which are pretty liquid anyways. In a worst-case scenario if they ran out of cash and couldn't sell the treasuries, they could easily get a 1-year loan against the endowment.

If they really kept it in a bank, they gave up nearly $40 million in extra revenue for no reason.
05-17-2017 05:47 PM
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Old Blue Offline
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Post: #35
RE: I'm Envious of Liberty's Endowment
You know what's scary. Imagine the yearly salary Liberty is going to be able to pay coaches. They will be able to hire the cream of the crop. I don't blame the Sunbelt for turning them down. Honestly who is going to be able to compete with them in 10 years? No one from G5, that's for sure. Their only drawback is being a Christian university they're limited to the type of athletes they can recruit. Or at least I hope so.
05-17-2017 06:38 PM
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billybobby777 Offline
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Post: #36
RE: I'm Envious of Liberty's Endowment
(05-17-2017 05:47 PM)Captain Bearcat Wrote:  
(05-17-2017 04:29 PM)SlyFox Wrote:  Part of the big jump was us choosing to move cash in the bank into the endowment. For years we chose to keep most of it liquid so we had more flexibility in how we spent the money. But now that we are nearly complete on a $1B renovation of campus over the past couple of years, we are moving more of the funds to longterm investments through endowment. It was the natural progression.

They kept $927 million in a savings account? The CFO should be fired on the spot.

Endowments earn 4% right now. A big part of endowments are typically in treasury bills or low-risk stocks, which are pretty liquid anyways. In a worst-case scenario if they ran out of cash and couldn't sell the treasuries, they could easily get a 1-year loan against the endowment.

If they really kept it in a bank, they gave up nearly $40 million in extra revenue for no reason.

There is no way they kept $927 million in the bank account. They are smart business people who would invest such a large amount to make it larger. I'm poor and I know that.
05-17-2017 08:40 PM
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Rabonchild Offline
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Post: #37
RE: I'm Envious of Liberty's Endowment
(05-17-2017 05:47 PM)Captain Bearcat Wrote:  
(05-17-2017 04:29 PM)SlyFox Wrote:  Part of the big jump was us choosing to move cash in the bank into the endowment. For years we chose to keep most of it liquid so we had more flexibility in how we spent the money. But now that we are nearly complete on a $1B renovation of campus over the past couple of years, we are moving more of the funds to longterm investments through endowment. It was the natural progression.

They kept $927 million in a savings account? The CFO should be fired on the spot.

Endowments earn 4% right now. A big part of endowments are typically in treasury bills or low-risk stocks, which are pretty liquid anyways. In a worst-case scenario if they ran out of cash and couldn't sell the treasuries, they could easily get a 1-year loan against the endowment.

If they really kept it in a bank, they gave up nearly $40 million in extra revenue for no reason.

They have so much money it would coast them mote in time to pick up the phone to call the bank to transfer it than just leave it where it's at.
05-17-2017 08:47 PM
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nzmorange Offline
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Post: #38
RE: I'm Envious of Liberty's Endowment
(05-17-2017 08:47 PM)Rabonchild Wrote:  
(05-17-2017 05:47 PM)Captain Bearcat Wrote:  
(05-17-2017 04:29 PM)SlyFox Wrote:  Part of the big jump was us choosing to move cash in the bank into the endowment. For years we chose to keep most of it liquid so we had more flexibility in how we spent the money. But now that we are nearly complete on a $1B renovation of campus over the past couple of years, we are moving more of the funds to longterm investments through endowment. It was the natural progression.

They kept $927 million in a savings account? The CFO should be fired on the spot.

Endowments earn 4% right now. A big part of endowments are typically in treasury bills or low-risk stocks, which are pretty liquid anyways. In a worst-case scenario if they ran out of cash and couldn't sell the treasuries, they could easily get a 1-year loan against the endowment.

If they really kept it in a bank, they gave up nearly $40 million in extra revenue for no reason.

They have so much money it would coast them mote in time to pick up the phone to call the bank to transfer it than just leave it where it's at.

It works the other way.

The more money you have earning a low interest rate, the more it costs you to not move it.
05-17-2017 09:13 PM
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nzmorange Offline
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Post: #39
RE: I'm Envious of Liberty's Endowment
I want to clarify, endowments can very much invest money in liquid assets (like cash in a bank account).

They usually don't because they can generally take advantage of their long horizon and invest in illiquid assets, which have historically given above average risk-weighted returns because not everyone can invest in them, so there's a supply/demand imbalance (see "Yale method")

However, that higher return is far less true today than in the past.

[EDIT: The Yale model involves a couple factors, but I'm pretty sure one of them involved investing in illiquidity]
(This post was last modified: 05-17-2017 09:23 PM by nzmorange.)
05-17-2017 09:16 PM
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mturn017 Offline
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Post: #40
RE: I'm Envious of Liberty's Endowment
I'm no legal expert but if their endowment came from funds that they themselves generated and not from outside donors as is typical, then there's probably no real restrictions on the money (maybe minimal). So what makes it any different than having the cash in operating funds (invested or not but as has been mentioned it be stupid to not having it earn something)? It seems they just decided to announce they had a billion dollars. Or maybe more to the point a billion dollars that they no longer needed to fund current capital projects.
05-18-2017 07:35 AM
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