Financials

Financial Summary

In 2021, global stocks delivered double-digit gains for the third year in a row, boosted by historic government response globally, the rapid development and approval of vaccines, strong corporate earnings, and pent-up consumer demand. Despite the threat of rising inflation, higher interest rates and the rapid spread of the omicron coronavirus variant, the U.S. market finished the year in record territory with a 28.7 percent gain for the S&P 500 index which notched 70 all-time highs during the year. On the other hand, bond markets had a difficult year due to high inflation and prospects for tighter monetary policy. 

To that end, strong performance from equities, both public and private, propelled the Foundation’s endowment to a new record high at the end of 2021; the portfolio value had appreciated to approximately $711 million, increasing by almost $80 million after disbursement for grants, administrative expenses and taxes totaling $29 million during the year. 

Despite the acceleration in the inflation rate, which was the highest in nearly four decades, the Foundation’s portfolio delivered an impressive return of 17.4% during the year, outpacing the inflation plus spending rate by a wide margin. In addition, the portfolio allocation—which is well-diversified across a wide range of asset classes and strategies—was rewarded in 2021, well ahead of its Reference Benchmark (60% MSCI All Country World/40% Barclays Aggregate Bond) during the year. Over the last 10 years, under Goldman Sachs’s advisement, our disciplined, prudent investment approach coupled with robust diversification has served us well; the portfolio surpassed both inflation plus spending rate and the 60/40 Reference Benchmark on a cumulative basis.

Over the course of 2021, with the assistance of Goldman, the Foundation had proactively rebalanced its investments to its long-term target allocation and within each asset class in response to market conditions. The Foundation has made significant progress in increasing exposure to private equity, partially contributed by stellar returns during the year. At the end of the year, the portfolio’s asset mix was 51 percent long-only equities, 17 percent fixed-income, 2 percent cash, 14 percent hedge funds, and a total of 16 percent in private assets. In comparison, the portfolio was comprised of 54 percent public equities, 16 percent fixed-income, 3 percent cash, 16 percent in hedge funds, and 11 percent in non-marketable alternatives as of the end of 2020.

As we entered 2022, uncertainty has become the predominant theme. Market volatility has substantially increased due to concerns about rising inflation and the likelihood of multiple interest rate hikes this year, followed by unexpected elevated geopolitical risks because of Russia’s invasion of Ukraine. As pandemic-induced uncertainty eases, the world GDP growth is expected to be above the trend in 2022, the risk of recession in the U.S. and globally will likely remain low, and elevated inflation levels will probably moderate over the course of 2022. However, increased escalation of the Russia-Ukraine crisis could be the key risk to this economic outlook.