Despite the near completion of a $1 billion capital campaign, the university remains significantly under-endowed Chief Financial Officer Chris Joyce said in a speech in ICC Auditorium on Wednesday night.

  Chris Joyce

“Our endowment is indicative of the challenges we face,” he told nearly 30 students. “We started a bit later so the size of our endowment is an indication of where we started.”

Using a PowerPoint presentation, Joyce, who joined the university in January, explained that the university only had an endowment of $80 million 21 years ago. Other elite schools such as Yale, have been amassing endowments of billions of dollars for nearly 50 years, he said.

Joyce, a senior vice president who also serves as university treasurer, described the university’s investment strategies, which he said have brought low returns in the past few years.

He called for a shift from publicly-traded equities, which account for 70 percent of the university’s endowment, to privately-traded equities.

Nonetheless, he warned against acting precipitously in moving funds from one portfolio to another, stating that the university’s endowment has grown from $610 million to $650 million since June.

Joyce said that the university would be hiring a Chief Investment Officer. The university currently uses a seven-member investment committee to help oversee the university’s investments.

The university’s investments underperformed last year, he said, resulting in a 1.9 percent loss on investments, down from the university’s benchmark of a 2.3 percent return.

“That’s an opportunity cost of about $4.5 million, which should give us some pause,” he said.

Joyce also said he hoped to see the university reduce the amount of investments in domestic debt from 15 percent to 10 percent.

“That debt has a high price tag. We’re spending a lot more on debt servicing than others are,” he said while noting that borrowing had helped with the university’s major capital construction projects.

This past spring Georgetown had its credit rating lowered by oody’s, one of the two major credit rating agencies, from the sixth to the seventh lowest place of ten possible ratings.

Because the university has reached its debt ceiling of $700 million, it can no longer rely on borrowing for future capital projects, which include a $38 million science center and an $80 million business school facility. The university has raised $12 million and $45 million for each project, respectively, University President John J. DeGioia said at a September faculty senate meeting.

Joyce discussed the completion of the university’s Third Century Campaign, which set a $1 billion fundraising goal. To date, the university has received $985 million and expects to finish the campaign within the calendar year.

“A lot of people ask why the endowment isn’t at least $1 billion,” he said. “We have a lot of pledges, but we first have to convert those pledges into cash.” Joyce also said that 30 cents on every dollar donated to the university goes toward the endowment.

The Georgetown University Student Investment Fund sponsored the speech.

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