Managing assets – Strategies vary

A variety of strategies adopted by North Carolina foundations for investing their endowments have met with mixed success in the face of the current economic downturn, the Winston-Salem Journal reported July 2.

After growing to $617 million at the end of last August from $262 million in 1982, when the foundation sold RJR Nabisco stock it had owned for years, for example, assets at the Kate B. Reynolds Charitable Trust in Winston-Salem fell to $550 million by the end of May, the newspaper said.

Two trusts supporting the Z. Smith Reynolds Foundation in Winston-Salem fell to $450 million from $490 million since last year, and expects income to fall from $25 million this year to between $22 million and $23 million next year, the newspaper said, while assets at the Winston-Salem Foundation grew by more than $12 million last year, mainly through new funds created by donors, not from investment returns.

By comparison, the Duke Endowment in Charlotte enjoyed growth of 23 percent in its assets last year, partly through limited exposure to the stock market and partly through hedge investments, the Journal said.

And assets fell less than 1 percent this year at the foundation, which has less than 30 percent of its assets in publicly traded stocks, 20 percent invested in deflation hedges such as bonds and fixed-income investments, and 10 percent in inflation hedges such as private oil and gas interests that have posted strong returns in the past 18 months.

Assets at the Mary Reynolds Babcock Foundation grew to $111 million by the end of March from $118 million last year.

The board of the Golden Leaf Foundation in Rocky Mount, which has $164.8 million in assets from the settlement between 46 states and the tobacco industry, has agreed to invest 25 percent of its assets in fixed-income investments and 75 percent into stocks, private equity and real estate, and is aiming for an annual return of 8 percent, the Journal said.

For full story, go to Winston-Salem Journal.

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