W A K E
F O R E S T
U N I V E R S I T Y
Philanthropy Report 2023
Asset Allocation June 30, 2023
Fixed Income 13%
Absolute Return 18%
The Endowment Portfolio is a diversified portfolio that invests in a broad mix of assets, including Equities, Real Assets (commodityrelated investments), Absolute Return (various hedged strategies) and Fixed Income.
Equities 55%
Real Assets 14%
Cumulative Performance (Growth of $1) June 1995 – June 2023
$10.7
$11.00 $10.00 $9.00
$7.4
$8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00
Endowment Portfolio
Blended Index Benchmark
Over the long term, the Endowment Portfolio has outperformed a benchmark that represents our current assetallocation target allocations (Blended Index Benchmark).
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Any investment entails significant risks, including loss of the entire investment. The Endowment Portfolio referred to represents assets of Wake Forest University and related entities of Wake Forest University during July 2009 – June 2023. The period June 2014 – June 2023 includes the deduction of investment management fees and expenses. The Blended Index Benchmark is a blended benchmark based on target weights to each of the asset classes in the strategic asset allocation of the Endowment Portfolio. Index performance shown reflects the reinvestment of dividends and other income. An index does not reflect the deduction of fees or other expenses.
Mar-23
Mar-22
Mar-21
Mar-20
Mar-19
Mar-18
Mar-17
Mar-16
Mar-15
Mar-14
Mar-13
Mar-12
Mar-11
Mar-10
Mar-09
Mar-08
Mar-07
Mar-06
Mar-05
Mar-04
Mar-03
Mar-02
Mar-01
Mar-00
Mar-99
Mar-98
Mar-97
Mar-96
Jun-95
$0
Return / Risk Ratio Period Ending June 30, 2023
1.6
1.5
1.4 1.2
1.1
1.0 0.8 0.6
0.6
0.7
0.6
0.6 0.4
0.4
0.5
0.5
0.2 0 1 year Endowment Portfolio
3 years Blended Index Benchmark
5 years 60% MSCI ACWI, 40% Barclays Aggregate
Over the past five years, the Endowment Portfolio has produced attractive risk-adjusted returns compared to both its primary benchmark and a balanced stock and bond benchmark.
Annual Endowment Support to the University $100
Fiscal Years 1995 – 2023
$90 $80 $70 $60
Cumulative Support (’95 – ’22): $1.481 Billion
MI LLI ONS
$50 $40 $30 $20 $10 $0
’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23
Over the past 29 years, the Endowment Portfolio has provided over $1.4 billion of operating support to the University. During this period, the annual support to the University has increased by 490%.
Financial Report Endowments provide an important source of financial stability for colleges and universities. Wake Forest University’s endowment was valued at $1.9 billion as of June 30, 2023. Of this amount, $1.1 billion supports schools, departments and programs on the Reynolda campus; the remainder represents the endowment funds supporting the academic, research and clinical missions of Wake Forest Health Sciences. In the year ended June 30, 2023, Reynolda Campus endowments provided $43.5 million in income for our operating budget. More than half of the endowment supports student financial aid. University administration, with the oversight of both the Investment Committee and Finance Committee of the Board of Trustees, pays close attention to intergenerational equity — balancing the needs of today’s students with the goal of preserving the purchasing power of the endowment for future students. In recent years, we have reduced our formula spending rate to better align with more moderate market returns expected in the future. Our formula spending rate has been reduced from 5.3% seven years ago, with gradual step-downs to 4.7% for the 2021-2022 academic year, and the most recent decrease to 4.5% for FY23.
Verger Capital Management provides investment management services to Wake Forest University, related organizations and other independent nonprofit institutions. Our endowment investment philosophy is based on achieving long-term riskadjusted returns through a diversified portfolio of assets. For the fiscal year ending June 30, 2023, the endowment earned a positive gross return of 4.6%. The last few years have been a good test for institutional portfolios, given the significant volatility (both up and down) that the market has experienced. Over the last three and five years ended June 30, 2023, the Wake Forest endowment has returned 11.5% and 8.0%, respectively. We continue to believe that our strategy of both participating in the upside when markets are performing well while protecting on the downside when markets are declining is the best approach to grow and compound Wake Forest’s capital over the long term, allowing for more consistent support of the University’s mission. Thank you for your continued generosity and support.
Jacqueline A. Travisano, Ed.D. Executive Vice President and Chief Financial Officer