Lousy at football, but Columbia’s great at investing

Columbia University’s investments rose 17 percent in the past year, beating gains of Harvard University, the world’s richest school, and the returns of a broad group of institutions for the second year in a row.

The university’s endowment, valued at about $6.5 billion as of June 30 after gifts and spending, rose an average of 7.9 percent annually in the past five years, Robert Hornsby, a spokesman for New York-based Columbia, said this week in an e-mail. That compares with a 4.7 percent gain at Harvard and a 3.1 percent increase for institutions tracked by Wilshire Associates Inc., a consulting firm in Santa Monica, California.

Columbia and Harvard’s gains mark a turnaround from respective losses of 16 percent and 27 percent the prior year amid the worst financial crisis since the Great Depression. Harvard, based in Cambridge, Massachusetts, said Sept. 9 its investments rose 11 percent, lagging behind the 13 percent median gain of institutional funds tracked by Wilshire.

“The successful investment performance over time has become a cornerstone of Columbia’s financial strength,” Robert Kasdin, a senior vice president at the university, said in an interview. “It provides a growing source of operating revenue and our donors know we take their trust most seriously.”

Harvard’s endowment climbed $1.4 billion to $27.4 billion as of June 30. The fund targets 23 percent of its investments in real assets such as natural resources and property, more than five times the allocation in the Wilshire universe, triggering its underperformance in the past year.

Columbia’s endowment gains generate about 13 percent of the university’s budget, Kasdin said. He declined to say how specific asset classes performed. The valuation of the fund is preliminary and unaudited, he said.