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Stanford endowment jumps 10 percent last year

Recovery follows devastating endowment plunge in 2009

Stanford University is working its way back to financial health following devastating investment losses in 2008-09.

But Stanford remains "wary" of the economic climate, the volatility of financial markets and the uncertainty around federal research funding and health-care reform, according to Randy Livingston, vice president for business affairs and chief financial officer.

The university's consolidated net assets were up 7.5 percent in fiscal year 2010, ending the year at $21.4 billion, Stanford reported.

Stanford's endowment was up 10 percent in 2009-10, standing at $13.9 billion at the Aug. 31 end of the fiscal year. The increase was due to investment gains, endowment gifts and other funds transferred into the endowment, the university said in a press release.

Just a year earlier, the endowment had plunged from $17.2 billion to $12.6 billion, forcing more than 400 staff layoffs, a campus-wide salary freeze, program consolidations and postponement of $1.1 billion in capital projects.

"When the financial downturn unfolded in 2008-2009, the University took swift action to reduce expenses and lower the endowment payout to operations," Livingston said.

"While Stanford is in a stronger financial position today, we remain wary of the economic climate, the volatility of financial markets and the uncertainty around Federal research funding and health-care reform."

In April 2009 the University issued taxable debt and placed approximately $800 million of proceeds in money market funds to ensure adequate liquidity to meet potential capital calls from investment partnerships and to support university operations. In light of improved financial conditions, the university plans to reduce the liquidity fund to $400 million over the next several months, Stanford said.

FY2010 results were reported to the university's Board of Trustees on December 14 and are posted on the Stanford bondholder Web pages.

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