The first half of the 2009 fiscal year (from Jul. 2008 to Jun. 2009) has been unkind to virtually every university, Northwestern included. But Northwestern’s endowment may be healthier today than those of other comparable universities — thanks to the Chemistry department.
A report released last week by the Commonfund Institute measured the financial performance of universities during the period July 2007 through June 2008. Northwestern’s gains were, among the 20 wealthiest universities, the highest by a significant margin. All told, the endowment grew 11.4 percent during that period, reaching a total of $7.24 billion.
In December 2007, the University sold its interests in a drug called Lyrica, the principal chemical compound of which was discovered by Northwestern Chemistry Professor Richard Silverman. The sale to the company Royal Pharma netted $700 million for the University. Of that money, $500 million went into the long-term investment pool, according to Ingrid Stafford, Northwestern’s associate vice president for financial operations and treasurer.
The Lyrica transaction, which Eugene Sunshine, Senior Vice President for Business and Finance, has called one of the largest of its kind, explains why Northwestern outperformed the 19 other wealthiest universities in the country during the 2008 fiscal year.
Gains from the 2008 fiscal year boosted Northwestern’s endowment to the position of eighth highest among American universities, according to the report. survey conducted at the end of the 2007 fiscal year had Northwestern’s endowment as the 11th highest.
The 2008 gains, however, only softened the blow of the continuing economic crisis, not deflected it. President Henry Bienen sent a campuswide letter in October saying that the endowment “has been hurt recently by the market’s steep decline.” According to the report released last week, endowments at colleges in every category lost an average of 20 percent during the first half of the 2009 fiscal year.
During the 2008 fiscal year, the biggest loser among the 20 wealthiest universities was the University of Pennsylvania, which lost 6.1 percent of its endowment. NU’s closest competitor for percentage gain was the University of Chicago, which increased its endowment by 6.9 percent.