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[[underlined]] Report of the Investment Policy Committee [[/underlined]]

Mr. Hohenlohe presented the following report on behalf of the Investment Policy Committee. As an update to the September figures included therein, he advised that the total market value of Smithsonian Endowments exceeded $100,000,000 as of December 31, 1982, and that due to an 18 percent return during the last quarter, the annualized return of the portfolio for the last four and one-half years was 17 percent per year, well ahead of the market averages.

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The Investment Policy Committee held its regular semi-annual meeting on November 23, 1982 in the New York office of Chairman William Burden. Present were Messrs. burden, Humelsine, Mott, Ripley, Salomon and Hohenlohe. Unable to attend were Messrs. Austin, Moriarty, Watson, Webb and Wheeler. The Committee reviewed endowment fund performance and investment strategy with each of the three investment managers.

As of September 30, 1982, the market value of Smithsonian Endowment funds under outside management was $87,978,000, compared to $77,411,000 on June 30, 1982, and $77,279,000 a year ago. The increase in market value over the last quarter of $10,567,000 consisted of: (1) interest and dividend income of $416,000 in excess of total return withdrawal of $906,000, including managers' fees (this excess was reinvested into principal for a total reinvestment of $2,008,000 of excess yield during this past fiscal year); (2) new money of $2,075,000 distributed to all three managers in proportion to their current holdings; and (3) market appreciation of $8,076,000, or +10.4% on June 30 assets. Total return performance (including interest/dividends as well as market appreciation) by individual manager is shown below for various periods ended September 30, 1982; the return for periods exceeding one year is shown on an annualized basis: