“This is about as good as it gets,” John T. Casteen III said last Thursday. Using the lunch hour (84 minutes, as it turned out), the president of UVA delivered his State of the University address to a light crowd in the auditorium of Old Cabell Hall. Casteen was positioned at a podium surrounded by potted shrubbery, affording him at times a leonine aspect that seemed apt, given that he’s an undisputed lord of the academic jungle. Virtually no other major university has had the same captain for as long (18 years in August) and few do as well as UVA in certain areas, one of which, endowment, was the topic of the aforementioned assessment. He was explaining that the market value of the compounded endowment, managed by UVIMCO, the University’s investment management company, exceeds $3 billion. Return for the 2007 fiscal year was more than 25 percent, with an average across the past five years of 15 percent. These extraordinary returns, he said, is the prime reason UVA can weather economic downturns.
Recess…what? Casteen has people who can make 25 percent on an investment—provided it’s $3 billion or more.
And the faltering housing market and overall economic storm clouds quickly gathering in the state and nationwide promise some down-turning to come. The state, now facing a revenue shortfall close to a billion dollars, might possibly need to trim its appropriation to UVA, now at $188 million, or 9 percent of the University’s budget, as localities start to cry for help.
|Casteen talking about endowment.|
At a Q&A organized for reporters following Casteen’s speech, he was asked if he anticipated that the bumpy economy would hinder the endowment’s stratospheric returns. “I’m not an expert on that,” he said, and then predicted that given the size of the endowment and the complex strategy that makes every sector of the economy an “object of investment,” it is “less likely there will be a catastrophe.”
More video from Casteen’s State of the University speech:
|Casteen talking about athletics.|
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