Exeter College Donors' Report p

EXETER COLLEGE DONORS’ REPORT | 09EXETER COLLEGE DONORS’ REPORT | 09College FinancesWilliam JensenIncome Statement2008-09As evidence of stress in the banking sectormultiplied in the latter part of 2007 and into2008, Exeter began raising cash from globalequity funds. When Lehman Brothers failedin October 2008, the College endowment washolding nearly 30% of its assets in cash andthis sheltered it from much of the turbulencewhich followed. Agricultural land, accountingfor some 14% of the endowment, held itsvalue, and the College had limited exposureto hedge funds and private equity. So it wasthat the College recorded a total return inthe year to 31 July 2009 of -3.33% and thisrelative stability has enabled the College tomaintain its operations whilst many muchwealthier institutions which experiencedgreater volatility were forced to retrench.The College was greatly helped in achievingthis outcome by the contribution of the fourexternal members of its Investment& Accounts Committee (three of them areOld Members) and by its investment adviser,Sand Aire, a family office founded and run byanother Old Member. New investments havebeen purchased cautiously and selectivelybut a substantial cash balance remains andwe are prepared for further turbulence whenliquidity is withdrawn by central banks.4Endowments have very longinvestment horizons and the receivedwisdom has been that they shouldbe able to ride out market volatility.Extreme stress in the financialsystem has exposed limitations tothe efficacy of diversification.The value of the portfolio at 31 July 2009was £42.5 million; this was after the transferof £1.5 million to the College’s revenueaccount and an exceptional grant of £683,000to the Michael Cohen Trust which supportsthe tutorial work of the College. The tableopposite summarises income and expenditurein the year. Exceptional efforts were made togrow commercial banqueting and conferencebusiness, whilst at the same time placinggreat emphasis on cost control; this resultedin an unexpected, though very welcome,surplus of £457,000. Apart from the majordevelopment of graduate accommodation atExeter House, the College did not undertakeany significant capital projects.Looking forward, there is concern over thesustainability of public funding for highereducation and Oxford expects an additionalblow from the withdrawal of the £5 million‘historic buildings’ grant from HEFCEfunding. Many students are finding thattheir families are not able to support theirstudies to the extent that was anticipatedand several funding bodies are now payinggrants termly rather than at the beginningof the academic year.The College has responded by makinghardship funding and bursaries a priorityin its allocation of resources. We are verygrateful for the support of our Old Membersand Friends, which has enabled Exeterto offer a guaranteed level of support tostudents facing financial hardship.WILLIAM JENSENFINANCE AND ESTATES BURSARINCOME (£,000)Academic Tuition Fees 2,105Accommodation and Catering 1,441Conferences and Functions 931Income from Endowment Return 1,532Donations (including Annual Fund but excluding capital and endowment gifts) 713Income from College Assets 690TOTAL INCOME 7,412EXPENDITURETuition and ResearchDirect Tuition Costs 1,753Library and Archives 97IT 158Maintenance of College Buildings 593Utilities 388Security costs 2053,194Student Support 636Accommodation and Catering (Including Conferences) 2,064College Administration 713Development Office 348TOTAL EXPENDITURE 6,955SURPLUS FOR THE YEAR 457Profit on Disposal of Property Assets 1,569ACTUAL SURPLUS FOR THE YEAR 2,0265