Report for the academic year - Libraries - Institute for Advanced Study

NOTES TO FINANCIAL STATEMENTS
Marketable debt and equity securities are carried at market value. Realized gains and losses
are computed based on the average cost of the investment. Fair values are determined
utilizing fair market prices.
Equity securities include the Institute's interests in certain limited partnerships with a
reported value of approximately $142,718,000 and a fair value of approximately
$148,558,250 at June 30, 2000. The Institute accounts for these investments under the
equity method and, accordingly, recognizes its proportionate share of ordinary income and
net realized gains attributable to the investments of the partnerships. The Institute's pro-
portionate share of ordinary income and net realized gain was $3,963,634 and $18,321,672,
respectively, for the year ended June 30, 2000.
In addition, equity securities include the Institute's interests in three open-ended invest-
ment funds (the "Funds") incorporated in the Cayman Islands with carrying values of
$59,910,113 and fair values of $89,683,018 at June 30, 2000. The Institute accounts for
these investments at the lower of cost or market value. Fair value is determined as the
number of shares held by the Institute multiplied by the net asset value for such shares.
Net asset value, as determined by the Funds, reflects the underlying assets held by the
Funds and any investment gain or loss. Realized gains and losses are computed based on
the actual cost of the investment,
The Institute's interests in limited partnerships and Funds represent 38.3% and 16.1%,
respectively, 54.4% collectively of total investments held by the Institute at June 30, 2000.
These instruments may contain elements of both credit and market risk. Such risks
include, but are not limited to, limited liquidity, absence of regulatory oversight, depen-
dence upon key individuals, emphasis on speculative investments (both derivatives and
nonmarketable investments) and nondisclosure of portfolio composition.
Substantially all of the assets of endowment and similar funds are pooled with each indi-
vidual fund subscribing to or disposing of units on the basis of the market value per unit,
determined on a quarterly basis.
127