May 28, 2009

Japanese Endowments Also Hit Hard in '08

According to Nikkei, Keio University, which manages 150 billion yen ($1.5billion) in its portfolio, saw paper losses reach 53.5 billion yen as of March 31. Allocating roughly 80% of assets in stocks and investment trusts, it has sought an annual return of 3-4%. Numerous financial instruments held by the university have lost more than half their value in the wake of the financial crisis. Although other universities have not suffered from securities investments as much as Keio, they learned their lessons the hard way.

The roughly 500 entities underlying Japan's four-year universitites manage 9.15 trillion yen($91.5 billion) in assets. With the dwindling number of children, tuition income and government subsidies are bound to decline. Many academic institutions have moved to increase returns on their assets to pay for teaching and research expenditures as well as capital investments.

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