Endowment 2021

02

ENDOWMENT REPORT

Andrew B. Wisdom served as Chair of the Endowment Management Committee from 2011 through 2021. Andy drew upon his deep investment experience as the founder of Crescent Consulting and his experience serving in board roles at numerous local organizations such as Ochsner, the Greater New Orleans Foundation, and many others, to provide thoughtful stewardship to the endowment and lead dozens of EMC members over his ten-year term.

During Andy’s tenure on the EMC, the endowment value grew from $1.0 billion to $1.9 billion and generated an annual return of 9.8%, ranking it in the top quartile of all institutions tracked by Cambridge Associates. This stellar performance translated to over $1.1 billion of value created for the endowment. During this same period, the endowment paid out $509 million to support the University’s operating budget.

Andy had the foresight to understand the importance and benefits of having a dedicated investment office and was highly supportive of the investment staff, which has grown to 11 professionals. He was instrumental in improving committee governance and pushing the investment office to professionalize infrastructure and operations.

We are eternally grateful for Andy’s commitment and devotion to making the endowment into a leading portfolio with top quartile returns. We thank Andy for his time, talent, gifts, and service to Tulane, which will have a lasting impact for many generations to come.

ENDOWMENT MANAGEMENT COMMITTEE Carol L. Bernick Polished Nickel Capital Management Ex-Officio Michael A. Corasaniti Tourmalet Advisors, LP Vice Chair Suzanne B. Grant Delaware State Pension Fund

Douglas J. Hertz United Distributors, Inc. Ex-Officio E. Pierce Marshall Jr. Élevage Capital Management, LLC Barry A. Malkin GEM Realty Capital, Inc. William A. Marko Jefferies LLC

David M. Mussafer Advent International Corporation Donald J. Peters Jr. T. Rowe Price Andrew B. Wisdom Crescent Capital Consulting Chair

Table of Contents Letter from the CIO

1

Endowment Support

2–4, 13

Market Events Endowment Returns

5 6–12, 14

Staff 15–16 Location 17

LETTER FROM THE CIO Dear Faculty, Staff, Alumni and Friends of Tulane University, It is my great pleasure to write to you as the university’s new Chief Investment Officer. I am excited to continue to serve the Tulane community and build upon the foundation that my predecessor and mentor, Jeremy Crigler, put in place during his tenure. As I reflected on the prior year, I could not help but feel immensely proud of everything the investment office accomplished. Under the backdrop of a raging pandemic and a leadership transition for the investment office, Tulane’s endowment achieved unprecedented results. During FY2021, Pooled Endowment and Eminent Scholars generated outsized returns of 35.8% and 28.5%, respectively, well ahead of their benchmarks and the 65/35 passive benchmark return of 24.2%. Performance was led by strong results in our private and public equity portfolios where our active managers did not merely keep up with the market rally, but meaningfully outperformed. On the back of the year’s strong results, Tulane’s total endowment reached a new high of $1.92 billion.

While our recent performance has been strong, I am even prouder of our long-term performance which not only preserved but grew the purchasing power of the endowment. Over the last ten years, Pooled Endowment and Eminent Scholars generated returns of 9.8% and 9.2%, respectively, ahead of their benchmarks and the CPI + 5% return of 7.0%.

In this year’s report, I am especially pleased to highlight the contributions of Andrew B. Wisdom who served as Chair of the Endowment Management Committee for the past ten years. Consistent leadership from Andy and retired CIO Jeremy Crigler, were key factors in the success the endowment enjoyed over the past decade. Their leadership helped build a strong portfolio, good governance, professional operations, and a wonderfully talented team. I thank Andy for his generous commitment of time and expertise, which

FISCAL YEAR 2021 ACCOMPLISHMENTS: F Hired four new managers and exited three across the marketable portfolios F Added to or trimmed from 14 existing managers F Committed approximately $71 million to private capital partnerships and co-investments

will have lasting impacts on the endowment and university.

F Added three new private capital relationships and re-upped with six others

Though our investment results to date are worth celebrating, I believe our work has only just begun. The investment environment

F Completed an extensive (11th annual) review of all managers in the portfolio

that lies ahead may prove to be a challenging one, led by a myriad of concerns such as lofty valuations, an unrelenting pandemic, rising inflation pressures, cross-border tensions, and climate change impacts, among many others. However, I have the utmost confidence that our committed investment staff and Endowment Management Committee will be ready to face the challenges of an ever-changing market environment. On behalf of myself and my entire team, we are honored to have the opportunity to manage the endowment and remain committed to serving the Tulane community for many years to come.

F Conducted 650+ manager meetings, calls and conferences F Hired a new Director of Operations and Compliance, Lily Kim, to our operations team F Completed our 13th annual summer analyst program and sponsored a Girls Who Invest scholar

Richard Chau Chief Investment Officer, Tulane University 2021 ENDOWMENT REPORT | 1

E NDOWMENT SUPPORT IMPORTANCE OF AN ENDOWMENT Protection – Innovation – Commitment After 187 years, Tulane University has established itself as one of the world’s preeminent educational and research institutions. The University’s mission exists in perpetuity. However, to continuously offer new programs and new services requires an ever-growing pool of financial resources. The Endowment is unique among the University’s revenue streams since it provides perpetual support for Tulane’s students, both current and prospective. To put the power of the Endowment in perspective, a $1.0 million gift made ten years ago and invested in the Pooled Endowment generated more than $510,000 in distributions used to recruit the highest quality students regardless of financial need, to pay professorships and fund basic research, and to perpetuate community service initiatives. Most importantly, that original gift remains intact today and will continue to fund Tulane in the future. We urge you to support the Endowment because these specific gifts ensure the long-term financial strength of the Institution, benefiting future generations of Tulanians.

COMPONENTS OF THE ENDOWMENT Pooled Endowment

MARKET VALUE $1,433.1

Eminent Scholars

$263.1

Separately Invested

$190.2

University-Owned Real Estate

$16.6

Gift Annuities/Life Income Trusts

$18.2

TOTAL ENDOWMENT

2 | 2021 ENDOWMENT REPORT

$1,921.2

EN DOWM EN T S U PPO RT $2,500

$1,500

$1,000

$500

POOLED ENDOWMENT

EMINENT SCHOLARS

SEPARATELY INVESTED

School of Public Health and Tropical Medicine A.B. Freeman 3% School of Business 7% Athletics 2%

FY 2021

FY 2020

FY 2019

FY 2018

FY 2017

FY 2016

FY 2015

FY 2014

FY 2013

FY 2012

FY 2011

FY 2010

FY 2009

FY 2008

FY 2007

FY 2006

FY 2005

FY 2004

FY 2003

FY 2002

FY 2001

FY 2000

FY 1999

FY 1998

FY 1997

FY 1996

FY 1995

FY 1994

FY 1993

FY 1992

FY 1991

FY 1990

FY 1989

FY 1988

FY 1987

$0 FY 1986

TOTAL ENDOWMENT (IN $MM)

$2,000

GIFT ANNUITIES & LIFE INCOME TRUSTS

School of Social Work 1% General University 21%

School of Liberal Arts 13%

Law School 6%

Centers, Institutes and Libraries 5%

School of Medicine 23%

School of Architecture 1%

Financial Aid 14%

School of Science and Engineering 5%

ENDOWMENT SUPPORT BY PROGRAM 2021 2021 ENDOWMENT REPORT | 3

E NDOWMENT SUPPORT Tulane to create its eighth Presidential Chair with $5 million gift from alumnus A $5 million gift from Tulane alumnus Richard M. Lerner (A&S ’81, B ’83) will create the university’s eighth Presidential Chair, this one devoted to increasing the world’s scientific understanding of aging and longevity.

Tulane will establish the Lawrence E. Lerner Presidential Chair Endowed Fund to support a professor in an interdisciplinary area of academic study. Lerner has requested that the initial chair holder be a scholar whose research focuses on gerontology or related disciplines. The Presidential Chair is named for Lerner’s father, a realestate developer and bank director who died in 2019.

For Lerner, the major challenge facing gerontology today is not just adding years to life but ensuring that those years are marked by higher levels of good health, vitality and vigor. “It’s great that people are living longer thanks to advances in science and medicine, but from experience many of us know that those additional years are not always good ones,” Lerner said. “In simplest terms, I hope that new and innovative research in the field of aging makes it possible for our loved ones to derive some pleasure from those incremental years. If not, what is the point?”

Lerner’s experiences with his father’s aging process have left an indelible mark on him and served as a major impetus for his gift to Tulane.

“I’ve never forgotten what a nurse who was taking care of my father in the hospital told me one day: ‘Whoever coined the term “aging gracefully” died young,’” Lerner recalled. “That statement rang true for me then, and it still does today. But it doesn’t have to remain that way forever. I’m hopeful that the establishment of a Presidential Chair in aging will contribute to the advancement of research that leads to healthier, happier and more productive lifespans. And as research helps us to better understand the process of aging, the ultimate aspiration is to slow it down and delay or prevent the onset of cognitive decline and dementia.”

Presidential Chairs are one of the top priorities for Tulane President Michael Fitts as he seeks to attract some of the world’s most renowned faculty members in areas such as biomedicine, coastal restoration, global health and fields not yet explored. These faculty members will embark on a pursuit of teaching and research that crosses multiple disciplines and helps transform the world.

“This gift is a testament to Rick Lerner’s devotion to Tulane, his love for his father and his concern for humanity,” Fitts said. “Rick thought very carefully about how best to honor his father and support Tulane while also addressing an issue of vital importance to the world. As our population experiences increased lifespans, understanding the science and improving the potential for healthy aging becomes more and more central to our society and to our future.

“While many institutions pared down plans and reduced expectations during these difficult times, Tulane — thanks to friends like Rick Lerner — has been able to expand its efforts to increase knowledge, understanding and discovery in multifaceted and complex fields such as aging and longevity,” Fitts said.

Lerner thinks Tulane is the perfect place to establish a chair to focus on this issue. “Tulane has an existing Center for Aging, so research in this field is clearly an institutional priority,” he said. “As I spoke with faculty and 4 | 2021 ENDOWMENT REPORT

administrators, they understood that the aging population faces multiple medical, psychosocial, logistical and environmental issues that are multilayered, complex and intertwined. They explained that these problems are inherently interdependent and can best be addressed with interdisciplinary solutions — something at which Tulane already excels. I wholeheartedly agree with that assessment and couldn’t be happier to lend my support to the university’s efforts to enhance quality of life in our aging society.”

Lerner graduated with a bachelor’s degree in political science from Tulane’s College of Arts and Sciences in 1981, serving for a time as editor-in-chief of The Tulane Hullabaloo. In 1983 he earned a master of business administration degree from the School of Business. He has been a member of the President’s Council at Tulane since 2012. Other Tulane alumni in the family are his brother, Ken (A&S ’84), and a nephew.

Now retired from a successful banking career, Lerner was chairman and chief executive officer of Annapolis Bancorp Inc. and its subsidiary, BankAnnapolis, and also was chairman of the Maryland Region of First National Bank of Pennsylvania after it acquired Annapolis Bancorp.

A resident of Annapolis, Maryland, Lerner is active in civic and nonprofit causes. Although his Presidential Chair gift is named for his father, it also is meant to honor his mother, Iris. Ironically, while both of his parents were prominent in charitable activities in Maryland and Washington, D.C., Lerner thinks his father might view this named endowment with some degree of chagrin.

“My father was a self-effacing man who believed in giving anonymously to charity and quietly helping people in need, so I’m pretty sure he would not approve of having this Presidential Chair named for him,” Lerner said.

“He was far more interested in supporting worthy causes than in taking credit for it, but I think this is a fitting tribute to a lifetime of good work and deeds, generosity and altruism. He set an example that his children and grandchildren can only aspire to follow.”

MARKET EVENTS FISCAL YEAR 21 FY2021 was one of the strongest years ever for nearly all risk assets, driven by improving economic momentum. Large scale intervention by both monetary and fiscal authorities put a floor under risk assets, driving rapid recoveries and pushing equity markets to new highs and credit spreads near historic lows. The MSCI ACWI ended the fiscal year with a robust +39.3% return with uniformly strong performance across regions.

The US markets continued their trend of strong returns with the S&P 500 up 40.8% and the Russell 2000 up 62.0%. The US markets were buoyed by a vaccine-led economic recovery that greatly benefited cyclicals, notably financials (+62%), industrials (+51%), and energy (+49%). US banks were beneficiaries of a reversal of loan loss provisions, M&A activity, and stock buybacks, which more than offset tepid loan growth and compressed net interest margins. Conversely, the more defensive sectors such as consumer staples (+23%) and utilities (+16%) lagged. Meanwhile, technology stocks continued their strong momentum (+42%) despite their bond proxy status as many cloud-based companies benefitted from a semipermanent shift to remote work. Finally, the Russell 3000 Value (+45%) slightly outperformed Russell 3000 Growth (+43%) after 5 years of under-performance but is still near 20+ year lows on relative valuation of cheapest stocks.

Following nearly a decade of relative under-performance, Emerging Markets led other markets with a return of 41.3%. Strong returns in South Korea (+70%), India (+57%), Latin America (+45%), and China (+40%) all contributed on the backs of a weakening US dollar and strong recovery in commodities and industrial sectors. International developed markets also fared well with MSCI Europe up 35.6% and MSCI Japan up 25.1%.

In private markets, despite the pandemic, US private equity firms raised over $250 billion in capital in 2020 and $180 billion in 1H21. Venture, growth equity and other private vehicles are increasingly making up a larger share of private markets, while buyout funds now account for less than half of total private assets under management. Buyout valuations remain elevated in both the US and Europe at 11.4x and 12.6x respectively, but still trade at the largest discount to public markets over the last decade. On the venture side, valuations have ticked up more in late rounds as more funding has led to more competition, including from crossover buyers. The number of unicorns (companies with valuations >$1 billion) has increased by over 490% in FY2021. Meanwhile, exit activity has picked up on the backs of healthy growth in both IPOs and M&A markets, all of which has led to a higher distribution of cash flows from private equity funds.

Credit performance in FY2021 was robust, as spreads across credit instruments significantly compressed to multi-year lows. Meanwhile, longer duration, high quality bonds were flat to down due to 1Q21 steepening as evidenced by the -3.2% return in US Treasuries. Currently, asymmetric downside exists on a further rise in rates, especially among longer duration assets.

The global economic rebound is likely to continue despite the COVID-19 Delta variant.

However, elevated levels of inflation will likely persist and, with them, upward pressure on interest rates. Higher rates would likely portend lower valuations, a significant risk for those companies trading at historically high valuations. Moreover, ongoing supply chain, labor cost and freight cost vulnerabilities will expose differences between those companies that have pricing power and those that do not. One silver lining is that a macro environment where outcomes may be more dispersed than is anticipated is supportive of active management, a driver of the endowment’s excess returns over time. Consequently, we remain committed to investing in best-in-class managers, while mindful of the macro risks.

FISCAL YEAR 2021 ENDOWMENT HIGHLIGHTS F Total Endowment ended the year at $1.9 billion F Distributions to support the operating budget totaled $66.5 million F 57 new Endowment Funds were created during the fiscal year F New gifts and transfers into the Endowment totaled $61.3 million F Combined return of +34.6% for Pooled Endowment and Eminent Scholars

CAPITAL MARKETS PERFORMANCE

AS OF FISCAL YEAR END 2021

1 YEAR 3 YEARS 5 YEARS 10 YEARS US EQUITY NASDAQ 45.3% 25.7% 25.9% 19.4% RUSSELL 2000 62.0% 13.5% 16.4% 12.3% S&P 500 40.8% 18.7% 17.6% 14.8% _______ INTERNATIONAL EQUITY MSCI AC ASIA EX-JAPAN 40.0% 12.2% 14.5% 7.0% MSCI AC WORLD EX-US 35.7% 9.4% 11.1% 5.4% MSCI EMERGING MARKETS 41.3% 11.6% 13.4% 4.6% _______ FIXED INCOME BARCLAYS AGGREGATE -0.3% 5.3% 3.0% 3.4% BARCLAYS 5-YR OTR TIPS 7.2% 5.6% 3.5% 2.3% MERRILL LYNCH HY MASTER II 15.6% 7.1% 7.3% 6.5% _______ MARKETABLE ALTERNATIVES HFRI EQUITY HEDGE 36.7% 11.3% 10.9% 6.5% HFRI FUND OF FUNDS 18.3% 6.3% 6.1% 3.9% HFRI EVENT DRIVEN 22.5% 6.5% 6.9% 5.1%

2021 ENDOWMENT REPORT | 5

E NDOWMENT RET URNS POOLED POLICY PORTFOLIO The market value of the Pooled Endowment was $1.433 billion as of June 30, 2021.

The investment of Tulane University’s endowment assets is governed by the Investment Policy Statement, which is reviewed at least annually by the Endowment Management Committee of the Board of Administrators. This document sets forth governance principles, investment objectives, and risk parameters. The Policy Portfolio for the Pooled Endowment included in the Investment Policy Statement represents the expected allocation of assets that will satisfy these return objectives and risk parameters. While formulated based on long-term data series, the Policy Portfolio is dynamic and responsive in its implementation to prospective economic conditions, risks, and opportunities presented by market dislocations. The static benchmark uses the Policy Portfolio’s weights as shown to the right and serves as one of the Pooled Endowment’s performance benchmarks.

Over the long term, the goal is to preserve the endowment’s purchasing power after spending and inflation.

POLICY PORTFOLIO Fixed Income Cash 1.0% 9.0% Private Real Assets 10.0%

Global Equity 30.0%

Public Real Assets 2.5%

Marketable Alternatives 27.5%

Private Equity 20.0%

HISTORICAL PERFORMANCE (NET OF FEES)

HISTORICAL PERFORMANCE (NET OF FEES)

Pooled 40%

Static Benchmark

Spending + CPI

35.8%

35% 30%

30.3%

25% 20% 15% 10%

13.7% 10.6%

13.5%

11.7%

11.2% 7.7%

9.8% 7.5%

7.9% 7.0%

5% 0%

6 | 2021 ENDOWMENT REPORT

1 Year

3 Year

5 Year

10 Year

EN DOWM EN T RET U RN S POLICY PORTFOLIO

Cash 1.0% Fixed Income 25.0% Global Equity 51.5% Private Real Assets 2.5% Public Real Assets 5.0% Marketable Alternatives 10.0%

HISTORICAL PERFORMANCE

EMINENT SCHOLARS POLICY PORTFOLIO The Endowed Chair and Endowed Professorship programs under the Louisiana Board of Regents matching program are collectively known as the Eminent Scholars Endowments. The same Investment Policy Statement governs both the investment of these assets as well as the Pooled Endowment. However, the Eminent Scholars’ Policy Portfolio is tailored to satisfy specific conditions of this matching program. These conditions include greater reliance on public stocks and bonds and limited use of hedge funds and private capital. Therefore, the resulting benchmark for the Eminent Scholars endowments shown to the right is different from that of the Pooled Endowment. In recent years, the matching program conditions were broadened, allowing for a more dynamic, diversified asset allocation. Mindful of the conditions under which these funds are generously matched by the state, many of the same investment managers and strategies are used in both portfolios.

Private Equity 5.0%

(NET OF FEES)

Eminent Scholars

Static Benchmark

Spending + CPI

35% 30%

28.5% 26.3%

25% 20% 15%

10.6%

10%

12.1% 11.2% 7.7%

11.9%

10.4% 7.5%

9.2%

7.8% 7.0%

5% 0%

1 Year

3 Year

5 Year

10 Year

2021 ENDOWMENT REPORT | 7

E NDOWMENT RET URNS

8 | 2021 ENDOWMENT REPORT

EN DOWM EN T RET U RN S ASSET CLASS SUMMARIES GLOBAL EQUITY

The Endowment’s Global Equity portfolio is comprised of 15 managers who invest in publicly- listed companies across the U.S. and international markets. The portfolio aims to capture the growth of the global economy and outperform passive indices through investments with high quality active managers. During the fiscal year, the portfolio returned 41.4%, outperforming the 39.3% return of the MSCI All Country World Index.

The domestic portfolio beat its U.S. benchmark by over 400bps while the international portfolio performed in-line with its benchmark. Longer term results remain strong with Global Equity having outperformed the MSCI ACWI over the last three, five, and ten years. During the year, our team added three new managers - a regional bank fund, a China-focused fund, and a nuclear power specialist. We also terminated one global emerging markets manager.

PRIVATE EQUITY

The Endowment’s Private Equity portfolio consists of 41 firms investing globally across buyout, venture capital, growth equity, and distressed strategies. The portfolio generated an exceptional return of 65.1% during the year, ahead of the Cambridge Associates PE index return of 57.4%. Our team was very active during the year, adding three new managers including two in venture and one in buyout. In addition, we re-upped with six of our top managers, including two buyout, two growth equity, one venture, and one distressed manager.

MARKETABLE ALTERNATIVES

The Endowment’s Marketable Alternatives portfolio aims to achieve attractive risk-adjusted returns that are uncorrelated to traditional asset classes, providing valuable diversification and downside protection in times of market stress. The Marketable Alternatives portfolio consists of 21 managers providing exposure to strategies such as long/short equity, multi-strategy, event-driven, as well as private and opportunistic credit. During the fiscal year, the Marketable Alternatives portfolio returned 17.7% versus the HFRI Fund of Funds Composite return of 18.2%, with strong returns across all strategies, notably Long/ Short Equity (19.8%) and Enhanced Fixed Income (18.5%). A CLO manager, a healthcare manager, and a global mid-cap long/short equity manager were the largest contributors to returns. The sole detractor included an aircraft leasing manager. During the year, we added one new manager and rebalanced across five managers.

PUBLIC REAL ASSETS

The Endowment’s Public Real Assets portfolio is intended to protect against unanticipated spikes in inflation and provide liquidity for growing the Private Real Assets portfolio. The portfolio currently includes one active manager that invests in U.S. midstream energy assets and MLPs. During the year, the Endowment redeemed from a passively managed mutual fund that provided diversified exposure to energy, agriculture, industrial metals, precious metals, and livestock. For the fiscal year, the portfolio returned 54.5% versus 45.6% for the Bloomberg Commodity Index, largely driven by the strong recovery in the commodity sector.

PRIVATE REAL ASSETS

The Endowment’s Private Real Assets portfolio consists primarily of energy, real estate, and mining. Following a few difficult years for the asset class, the Private Real Assets portfolio rebounded as global economies began to recover from COVID-19. The asset class returned 14.7% during the year, edging out the Cambridge Associates benchmark, which returned 14.6% over the same period. Despite the rebound in performance, we remain underweight the asset class and continue to be cautious when considering new commitments. As a result, we did not add any new managers in Private Real Assets over the past year.

CORE FIXED INCOME

The Endowment’s Core Fixed Income portfolio includes exposure to U.S. Treasuries, agency mortgages, and investment grade bonds. Fixed income generally provides moderate returns but dampens volatility as a hedge against deflation and declining equity markets.

We view this portfolio as a source of liquidity under crisis conditions. During the fiscal year, fixed income markets declined amidst the rise in risk assets and inflation, including the highest core CPI reading in 30 years. The Core Fixed Income portfolio generated a return of 0.5%, outperforming the -1.2% return of the Barclays’ U.S. Intermediate Treasury Index, largely due to credit exposure and shorter duration. Given today’s risk versus reward, we remain underweight the asset class, which is offset by a higher allocation to cash.

2021 ENDOWMENT REPORT | 9

EN DOWMENT RET URNS TOTAL POOLED AND EMINENT SCHOLARS VALUE ADDED

Together, the Endowment Management Committee and Staff strive to add value over the Policy Portfolio through manager selection, constructive asset allocation, and tactical implementation without adding undue risk. As shown in the graph below, our collective effort over the last 12 years has produced a compounded $184.7 million of additional value, resulting in $43.2 million of additional payout to the University. During this period, the Endowment has also had a lower realized volatility. Our collective investment process seeks to continuously enhance the portfolio's risk-adjusted returns to preserve the purchasing power of the Endowment over time, given the current economic environment.

+ EMINENT VS. STATIC BENCHMARKS POOLEDPOOLED + EMINENT VS. STATIC BENCHMARKS

$200.0 $180.0 $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $-

$54.4

$37.2

$17.1 - $8.1

$21.0

$30.6 - $7.0 $13.0 $15.1 -$12.7 FY10

10 | 2021 ENDOWMENT REPORT

FY11

$22.1 $2.1 FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

$200.0 $180.0 $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $-

EN DOWM EN T RET U RN S ENDOWMENT PERFORMANCE VS. CAMBRIDGE PEERS

A wide variety of metrics, such as a constructed asset class benchmark based on our policy portfolio or a passive market index, are used to evaluate the performance of our portfolios. Most importantly, we measure our long-term results versus our principal objective, which is to preserve the purchasing power of the Endowment after spending and inflation. However, we also pay attention to how our colleagues at other foundations and endowments manage similar long horizon portfolios. In this regard, Tulane had a strong year given that the average endowment returned 31.8% and the cutoff for top quartile was 34.5%. Of the ~390 institutions reporting to Cambridge Associates, Tulane’s 34.6% for fiscal year 2021 is within the top quartile of all returns in the country. Even more

importantly, our three-, five-, and ten-year returns also fall within the top quartile. Much like U.S. News & World Report rankings, these data points make for good cocktail chatter but are not our primary objective. We have immense respect for our industry colleagues, each of whom has a unique risk profile driven by institutionally specific criteria. We often invest in many of the same managers and openly share our research and analysis. And so, while our peer ranking is noteworthy, it is just one metric among many that we use to evaluate results.

TULANE VS. CAMBRIDGE ENDOWMENT COMPOSITE TULANE VS. CAMBRIDGE ENDOWMENT COMPOSITE PERIODS ENDING 6/30/2021¹ (PERIODS ENDING 6/30/20211)

45.0% 40.0% 35.0% 30.0%

TOP 5%

25.0%

TULANE

20.0%

25%–50%

15.0%

50%–75%

X

10.0%

BOTTOM 5%

5.0% 0.0%

T ul ane² T op Q M edi an N

MEDIAN

1 Year

3 Years

3 4. 6% 3 4. 5 % 31 .1 %

1 3 . 4% 1 3.1 % 1 1 . 6%

3 92

3 87

5 Years

13.2% 12.2% 11.2% 381

10 Years

9. 7 % 8. 9% 8. 0% 354

¹Cambridge data as of September 10, 2021

²Represents the performance of the Endowment's Total Combined Assets 2021 ENDOWMENT REPORT | 11

E NDOWMENT RET URNS 5- AND 10-YEAR PERFORMANCE VS. PEERS

SHARPE RATIO (5 YR.)

Tulane’s Endowment has enjoyed particularly strong results over the last five and ten years.

Generally, strong returns should be viewed with some skepticism, since higher returns are often the result of taking additional risk. However, Tulane has achieved strong returns without taking on additional risk, as evidenced by the Sharpe ratio. Over the last five years, the Endowment’s Sharpe ratio was 1.47, ranking Tulane in the 99th percentile among peers.

Similarly, over the last ten years, the Endowment achieved a Sharpe ratio of 1.21, placing it in the 95th percentile among peers.

5th Percentile

25th 50th 75th Percentile Percentile Percentile

95th Percentile

TULANE UNIVERSITY

0.6 0.8 1.0 1.2 1.4 1.6

Another way to show the relationship between risk and return is using a scatter plot.

When compared to the 353 endowments in the Cambridge Associates Endowment Composite database, the Endowment ranks in the 85th and 3rd percentiles for both return 10 YEAR RISK VS. respectively, PEERS and volatility, as shown in the upper left quadrant of the chart below. The combination of unusually muted market volatility along with Tulane’s asset allocation and strong manager selection has resulted in exceptional risk-adjusted returns over the last five and ten years.

10 YEAR RISK VS. PEERS 12.0 11.0

10 Year Return

Tulane

10.0

high school student should have to cross Tulane off their list because of the cost or the fear of lifelong loans — that would be a shame.

————

9.0

Median 8.0 7.0

”

6.0 5.0 4.0

“ No hardworking, high-achieving

BOARD OF TULANE MEMBER RICHARD YULMAN

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

10 Year Volatility 12 | 2021 ENDOWMENT REPORT

1

EN DOWM EN T S U PPO RT Yulman family makes $5 million matching-challenge gift to expand scholarships at Tulane

The family who led the charge to build Tulane’s Yulman Stadium is stepping up once more for the university, this time with a $5 million matching-challenge gift to increase scholarship opportunities for all students.

of their lives,” she said. “We followed their progress and still keep in touch with some of them today, so we know the impact it had.”

Board of Tulane member Richard Yulman and his daughter and son-in-law, Katy (NC ’05) and Greg Williamson, are sponsoring the Next Wave Scholarship Challenge, which will match new endowed scholarship donations of $100,000 to $500,000. This initiative seeks to increase the overall endowment dedicated to scholarship support.

Under the Next Wave challenge, new endowed scholarship gifts of $100,000 to $500,000 will be matched dollar for dollar, thereby doubling the value of donations. The match may also be available for new gifts to existing endowed scholarships, that meet minimum criteria, to further their reach and impact. The challenge will benefit scholarship recipients at the undergraduate and graduate levels in every school of the university.

“Once again, the Yulman and Williamson families have displayed their commitment to both current and future Tulane students. Their extraordinary generosity will inspire other supporters to help make the transformative experience of a Tulane education available to qualified students regardless of their economic background. Such access is essential to creating a truly great university that embraces diversity and benefits from having the widest variety of thoughts, perspectives and contributions within its academic family,” Tulane President Michael Fitts said.

“Endowed scholarships allow extraordinary students to attend Tulane who otherwise could not afford to and to graduate without overwhelming student loans, so that they can pursue their dreams without the constraint of having to pay off a huge debt,” Tulane Provost Robin Forman said. “This makes a scholarship a gift not only for our students, but also for every community our graduates enter where they can make the sort of contributions that they are meant to make. I am thrilled that the Yulman and Williamson families have chosen to support scholarships with this extremely generous gift, and I hope that the matching challenge energizes others to contribute to this exciting and important effort."

Yulman, the retired co-chairman and owner of mattress manufacturing giant Serta International, serves as a campaign co-chair of Only the Audacious, The campaign for an ever bolder Tulane, the most ambitious and comprehensive fundraising effort in Tulane’s history. Katy is a co-chair of the National Campaign Council for the Tri-State area. The challenge they’re spearheading will propel Tulane’s $1.3 billion campaign above its important target of $125 million for endowed scholarship support.

“No hardworking, high-achieving high school student should have to cross Tulane off their list because of the cost or the fear of lifelong loans — that would be a shame,” Yulman said. “We want talented students to be able to come to Tulane regardless of their financial backgrounds, and they ought to be able to make career choices unencumbered by debt,” Yulman said.

“Tulane already is a leader and innovator in higher education, and it will grow even stronger as a university by bringing aboard as many of the best and brightest as possible. I’m confident that our Green Wave community will rise to this scholarship challenge and help bring the ‘Next Wave’ of outstanding doers and thinkers to Tulane.

That’s what our Only the Audacious campaign is, in many ways, all about.”

Yulman was elected to the Board of Tulane in 2005, shortly before Hurricane Katrina devastated the New Orleans area. Through the Yulman family’s philanthropy and leadership, Yulman Stadium was born in 2014, serving not only as Tulane’s first on-campus football stadium in almost 40 years but also as a prominent symbol of the university’s post-Katrina renaissance.

Yulman served as vice chair of the Board of Tulane from 2008 until 2017, when he became an emeritus member. He was re-elected to the board in 2018 and is active on its Advancement, Intercollegiate Athletics, Physical Plant and Campus Development committees.

Yulman was named an honorary alumnus of Tulane and received the alumni association’s Dermot McGlinchey Lifetime Achievement Award in 2017. He also is a member of the Paul Tulane Society, which honors individuals and organizations that have donated $1 million or more to the university. He and his late wife of 37 years, Janet, were members of the university’s Parents Council.

Yulman became convinced of the need to increase scholarship availability after accompanying a Tulane admissions counselor to a Miami high school, pre-pandemic, and talking face-to-face with capable students eager to apply but lacking the financial means. His conversations with those young people left a lasting impression.

A psychology major, Katy graduated cum laude from Newcomb College in spring 2005. She spent months as a volunteer in Houston helping her alma mater rebound from the Hurricane Katrina disaster. In 2012 she married Greg, a co-founder of UpperWest Music Group and a real-estate broker for Douglas Elliman Real Estate in New York. They have two children. Both Katy and Greg are members of Tulane’s President’s Council.

“My dad told me how much that high school visit touched him personally and inspired him to want to do something significant to make a Tulane education more accessible,” said Katy Yulman-Williamson. “That’s why we’re making this commitment now. We want to raise the bar with this gift and hopefully motivate others to join in this philanthropic effort.”

The Next Wave Scholarship Challenge is not the first time that the family has supported scholarships at Tulane.

The university’s annual Tipping Point concert, which raises money for scholarships, has benefited from their generosity as well as from Greg’s event production expertise. The push now to expand Tulane’s scholarship endowments was a natural move for the Yulman and Williamson families.

The Yulman family has been setting philanthropic examples for a long time now, especially in education. “I have many memories as a little girl of hanging out with the kids from the ‘I Have a Dream’ scholarship program that my parents created in Albany, N.Y., in 1988. They promised almost 100 inner-city sixth-graders that they would pay their college tuition if they graduated from high school,” said Yulman-Williamson, who along with her brother Brett, is an avid Tulane fan and supporter.

This $5 million gift is part of a $10 million commitment made at the beginning of the campaign, with an eye toward later designating its use for an area of greatest need for the university. It became apparent the university needed scholarships and that meeting that need was an area where they could make a significant impact. As with the Next Wave Challenge and Yulman Stadium, the family has again set the bar for achieving greatness through collective philanthropy. The remaining $5 million was designated to create a Presidential Chair, another important initiative for the campaign and a top priority for President Fitts.

With the Yulmans’ help, many of these “Dreamers” went on to attend community colleges and universities such as Cornell, Howard, and the Rensselaer Polytechnic Institute. “The opportunity changed the trajectory

2021 ENDOWMENT REPORT | 13

E NDOWMENT RET URNS SEPARATELY INVESTED FUNDS

Large endowments, typically $1 million or more, which are not invested in the Pooled Endowment due to specific donor restrictions are invested separately. These funds are overseen by the Department of Treasury and Trust Investment Office in New Orleans.

At fiscal year-end, the Separately Invested Endowment Funds totaled over $190 million. They are comprised of common stock, fixed income, private equity, venture capital, money market, and donor-directed externally managed accounts.

GIFT ANNUITIES AND LIFE INCOME TRUSTS

Tulane University Life Income Trusts and Annuities totaled over $18 million as of June 30, 2021. Most of these assets are managed by State Street Global Advisors (SSGA), and payments are made to the donor or other designated beneficiaries for a specified term or life of the beneficiaries. The remainder assets are typically contributed to Tulane’s Endowment. These funds are comprised of common stock, fixed income, and real estate investment trusts. The asset allocation is determined based on age of beneficiaries, term of trust, payout rate, and any special circumstances.

SEPARATELY INVESTED ENDOWMENT FUNDS Murphy Institute

MARKET VALUE $104.0

Celia Scott Weatherhead

$53.1

Samuel Stone CIPR Trust

$23.2

Vanselow / Pediatric

$4.2

All Others Combined

$5.7

TOTAL SEPARATELY INVESTED

14 | 2021 ENDOWMENT REPORT

$190.2

STA F F

RICHARD CHAU, CHIEF INVESTMENT OFFICER

Richard joined the Investment Management Office in September 2013. Prior to Tulane, he helped manage a multi-billion dollar global private equity portfolio in Bessemer Trust’s Private Equity Funds Group. Before Bessemer, Richard worked in the investment office at The Andrew W. Mellon Foundation. His previous experience also includes investment banking at Houlihan Lokey and investment consulting at Cambridge Associates. Richard has a BA in Economics and Chinese from Williams College and an MBA from Columbia Business School.

JULIA MORD, DEPUTY CHIEF INVESTMENT OFFICER

Julia joined the Investment Management Office in May 2014 and is responsible for all public markets investing. From 2006 to April 2014, Julia was an investment officer at AI International, a NYC-based family office, where she was responsible for co-managing a multi-asset class portfolio. Prior to her experience at AI International, Julia worked at Jefferies & Company and Ernst & Young. Julia has a BA in Economics from the University of Chicago, an MBA from The Wharton School at the University of Pennsylvania and is a CAIA charterholder.

PAUL WEAVER, DIRECTOR OF INVESTMENT ACCOUNTING

Paul joined the Investment Management Office in September 2008. From 2005 to 2008, Paul worked at OpHedge Investment Services as Director of Fund Accounting where he was responsible for managing the accounting group and for calculating NAVs of large, complex hedge funds. Before OpHedge, Paul had over 20 years of experience working in various accounting related roles for both hedge funds and large financial firms. Paul holds an MBA with a concentration in International Finance from Pace University.

JAKE KRIEGSFELD, DIRECTOR

Jake joined the Investment Management Office in June 2013 after previously completing an internship with the Office. He graduated summa cum laude from Tulane’s A. B. Freeman School of Business in 2013 with a BSM in Finance and as a member of the William Wallace Peery Society, which recognizes 15 graduating seniors for academic excellence.

Jake also earned a minor in Spanish and completed an international business program in Madrid, Spain. Jake is a CFA charterholder.

2021 ENDOWMENT REPORT | 15

STA FF LILY KIM DIRECTOR OF OPERATIONS

Lily joined the Investment Management Office in June 2021. From January 2019 to June 2021, Lily was a Senior Vice President for Global Manager Research, a division of Wells Fargo Investment Institute, conducting due diligence and providing research on third-party money managers. Prior to joining Wells Fargo, Lily was the Head of Legal Due Diligence for Alternative Fund Solutions at Credit Suisse where she managed and led the global due diligence process from an investment structuring perspective. Lily started her financial career with K2 Advisors, a subsidiary of Franklin Templeton Investments, and began her professional career at the White House working in the Executive Office of the President. Lily earned her Juris Doctor from the University of Mississippi School of Law and received her BSBA from Mississippi College where she was a Presidential Scholar.

BRAD BAUGUSS, INVESTMENT ASSOCIATE

Brad joined the Investment Management Office in July 2015 after completing an internship with Intrepid Capital Management the previous summer. He graduated cum laude from Tulane’s A. B. Freeman School of Business in 2015 with a BSM in Finance and Economics and a Specialization in Entrepreneurial Management. Brad is a CFA charterholder.

EDWARD ROMAN, INVESTMENT ANALYST

Edward joined the Investment Management Office in August 2018 after completing an internship with the Office. He graduated magna cum laude from Tulane’s A. B. Freeman School of Business in 2018 with a BSM in Finance and Management Consulting and a minor in Economics. Edward is a CFA Level III candidate.

MAX GEVIRTZ, INVESTMENT ANALYST

Max joined the Investment Management Office in February 2019. From August 2016 to January 2019, Max worked at Grant Thornton LLP in their Advisory Services department.

He graduated cum laude from Tulane’s A.B. Freeman School of Business in 2016 with a BSM in Finance and a Master of Accounting. Max is a CPA and is a CFA Level III candidate.

JANINE JANDROSITZ, DEPARTMENT ADMINISTRATOR

Janine joined the Investment Management Office in August 2016. Before joining the team, she worked for ten years as the VP of Administration for Lincoln Healthcare Leadership where her role encompassed Human Resources and Office Management.

She also worked as an Executive Assistant for Greenbriar Equity. Janine has a BS in Business Management from the University of Redlands.

16 | 2021 ENDOWMENT REPORT

ROBERT LYCOUDES, PERFORMANCE ASSOCIATE

Robert joined the Investment Management Office in January 2017. From November 2014 to January 2017, Robert worked in the Margin Lending department at Goldman Sachs. Before that, he worked at Interactive Brokers and interned at UBS Private Wealth Management. Robert received his BS in Mathematics and Finance from Sacred Heart University in 2012.

MARY KOPAS, PERFORMANCE ANALYST

Mary joined the Investment Management Office in February of 2020. She has worked most of her career in accounting and finance roles for government contractors, Norden Systems, a division of United Technologies, as well as Northrop Grumman. She also has experience in the non-profit sector as an accountant at Norwalk Hospital Foundation and Americares Foundation. She is a graduate of the University of Connecticut with a BS in Accounting.

LO C AT I O N

LOCATION, LOCATION, LOCATION

As one of the first universities to locate their investment office away from campus — 1,354 miles away in Darien, Connecticut — Tulane has been recognized for its innovative approach to endowment management, paving the way for several other schools to follow our path and locate off-campus. Our motivation to locate the office in the New York City region was to provide staff with the best possible access to investment managers, research firms, and industry conferences that are frequently held within the New York and Boston corridor. Conveniently located near the Metro North rail line and I-95, the office location allows for a quick trip into Manhattan or other nearby financial centers including Greenwich, Stamford, Boston, and Washington, DC. 2021 ENDOWMENT REPORT | 17

After an unprecedented year, the Class of 2021 celebrated the first-ever Commencement in-person in Yulman Stadium, with nine individual school ceremonies held over the course of three days.

Proud family and friends filled the stands of the stadium, socially distanced, to cheer on the graduates as they crossed the stage.

Tulane University • Investment Management Office • 9 Old Kings Hwy, South • Darien, CT 06820 • (203) 716-8470