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FIN A NCI A L RE P O RT

END O W MENT RE P O RT SMU’s endowment ended the fiscal year on May 31, 2013, with a market value of $1.268 billion, representing an increase of $105.7 million compared to the market value on May 31, 2012. Endowment gifts totaled $36.2 million for the one-year period, while endowment distributions of $54.7 million provided substantial support to University operations and accounted for 16 percent of the operating revenue budget. This spending support funded many restricted and unrestricted purposes, including scholarships, faculty support, educational programs and libraries. We are pleased to report a total return of 11.3 percent for the one-year period ending May 31, 2013. Global equity and diversifying strategies performed well and contributed substantially to the increase in valuation. The environment for private investments was more challenging, particularly outside of the U.S., and the private portfolio generated lower returns. The beginning of 2013 experienced greater market stability and a somewhat more favorable environment for developed equities. Concerns about the sustainability of the current U.S. equity bull market, an increase in interest rates, and geopolitical events around the world contribute to an investment environment that is challenging and demanding. SMU benefits from the generosity of its donors – past and present students, parents, faculty and staff, and friends of the University. We will continue to maintain a disciplined focus on investment strategies and opportunities designed to grow the portfolio over the long term, while achieving an appropriate level of risk and diversification. Meeting those goals will enable the endowment to support SMU into its second century.

ENDOWMENT GROWTH AND TOTAL RETURN 1998–2013 35%

$1,400,000,000 $1,200,000,000

25%

$1,000,000,000

20% 15%

$800,000,000

10%

$600,000,000

5%

$400,000,000

0%

$200,000,000 $0

-5%

1998

1999

Strong market growth

2000

2001

2002

2003

Tech bubble burst; market retraction

2004

2005

2006

2007

Market recovery; global economic expansion

2008

2009

2010

2011

2012

2013

Mortgage/credit crisis; market volatility

Market Value Total Return Percentage

42

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smu.edu/annualreport

-24.2%

9% long-term goal for total return

30%


SMU Annual Report 2012-13