Key Takeaways
- • Drexel University's combined endowments, covering the university and the Academy of Natural Sciences, reached $1 billion for the first time last year, according to the Drexel Investment Office.
- • The endowment's spend rate is set by the Board of Trustees within a 2% minimum and 7% maximum mandated by the Commonwealth of Pennsylvania, with over $260 million distributed in the past eight years.
- • Gifts to the Drexel endowment have averaged $13 million per year over the last eight years, though restricted gifts limit withdrawable funds.
- • The portfolio is split into growth, safety and inflation asset buckets and has delivered an annualized return of approximately +8.3% across 32 years.
- • The Dragon Fund, a $4 million mid-cap equity portfolio run by undergraduates at the LeBow College of Business, was the endowment's best-performing manager last year with a +12.3% annualized return since September 2007.
Summary
Drexel University's endowment, the largest asset on its balance sheet, is managed by the Investment Office with guidance from the Board of Trustees' Investment Committee. Per the Investment Office's latest installment of its "How Does It Work?" series, the combined endowments for Drexel University and the Academy of Natural Sciences reached $1 billion for the first time last year. The series features Chief Investment Officer Cathy Ulozas, Managing Director and Deputy CIO Matt DeAngelo, Senior Investment Analyst Chi Nguyen and Investment Analyst Stephen Chase.
The endowment is designed to exist in perpetuity, with income returned to the university each year to fund scholarships and financial aid, research and faculty salaries, facilities, academic programs and community outreach. The Investment Office manages two endowments, one for the university and one for the Academy of Natural Sciences. A spend rate, set by the Board of Trustees within Pennsylvania's 2% to 7% range, determines annual distributions; both endowments together have spent over $260 million in the past eight years. Non-pooled trusts and annuities are included in the endowment but are managed by donors or their designees rather than the Investment Office.
Gifts and grants average $13 million per year over the last eight years, though donor restrictions limit the portion available for withdrawal. The portfolio holds thousands of investments across three buckets: growth assets (global equity, private equity, venture capital and high yield), safety assets (fixed income, cash and marketable alternatives such as traded loans), and inflation assets (real estate, commodities and infrastructure). The total portfolio has grown since the Drexel endowment was formalized in 1991 and the Academy was added in 2012, with an annualized return of approximately +8.3% over 32 years.
The Investment Office notes that a common misconception is that funds can be withdrawn freely. Restrictions come from state government, the Board of Trustees and donors, and the pooled structure complicates separating restricted from unrestricted funds during withdrawals. The portfolio is diversified across asset classes, sectors and countries to manage exposure to economic and geopolitical volatility.
The Dragon Fund, a $4 million U.S. mid-cap equity portfolio launched in September 2007 with a $250,000 initial investment, is managed by undergraduate students at the Bennett S. LeBow College of Business. The fund was the endowment's best-performing manager last year and has an annualized return of +12.3% since inception, with early picks including Netflix and NVIDIA. Endowment support has also funded major capital projects, including the purchase of St. Christopher's Hospital for Children and the refurbishment of residence halls, including Kelly Hall.
The endowment is designed to exist in perpetuity, with income returned to the university each year to fund scholarships and financial aid, research and faculty salaries, facilities, academic programs and community outreach. The Investment Office manages two endowments, one for the university and one for the Academy of Natural Sciences. A spend rate, set by the Board of Trustees within Pennsylvania's 2% to 7% range, determines annual distributions; both endowments together have spent over $260 million in the past eight years. Non-pooled trusts and annuities are included in the endowment but are managed by donors or their designees rather than the Investment Office.
Gifts and grants average $13 million per year over the last eight years, though donor restrictions limit the portion available for withdrawal. The portfolio holds thousands of investments across three buckets: growth assets (global equity, private equity, venture capital and high yield), safety assets (fixed income, cash and marketable alternatives such as traded loans), and inflation assets (real estate, commodities and infrastructure). The total portfolio has grown since the Drexel endowment was formalized in 1991 and the Academy was added in 2012, with an annualized return of approximately +8.3% over 32 years.
The Investment Office notes that a common misconception is that funds can be withdrawn freely. Restrictions come from state government, the Board of Trustees and donors, and the pooled structure complicates separating restricted from unrestricted funds during withdrawals. The portfolio is diversified across asset classes, sectors and countries to manage exposure to economic and geopolitical volatility.
The Dragon Fund, a $4 million U.S. mid-cap equity portfolio launched in September 2007 with a $250,000 initial investment, is managed by undergraduate students at the Bennett S. LeBow College of Business. The fund was the endowment's best-performing manager last year and has an annualized return of +12.3% since inception, with early picks including Netflix and NVIDIA. Endowment support has also funded major capital projects, including the purchase of St. Christopher's Hospital for Children and the refurbishment of residence halls, including Kelly Hall.
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