Queen’s Endowment fund planted a new investment strategy to meet sustainability goals and maintain long-term performance.
In the 2021-22 Endowment Fund Report, Queen’s showcased the second highest funds among Canadian universities—in proportion to its full-time student population. Endowment funds use donation money for investment portfolios to generate income for the university.
Queen’s fund totaled $1.4 billion as of April 30.
Jim Keohane, chair of the of the Board of Trustees Investment Committee, said in the report Queen’s endowment fund has seen “outstanding performance” in the last 10 years.
The high performance of the fund is apparent in a compounded annual return of 9.7 per cent, reflecting the value of the fund’s growth over time.
Incorporating environmental, social, and governance (ESG) criteria are important to maintain the fund’s performance in the long term, according to Keohane. ESG criteria considers the social responsibility of a company as investors screen potential investments.
“The committee has been working hard to adjust the asset mix to meet our long-term objectives to continue to have a lasting positive impact on the Queen’s community,” Keohane said.
The report echoed a recommendation from the Board of Trustees’ Climate Change Action Task Force to reduce the carbon footprint of university investment portfolios.
Going forward, Queen’s will allocate at minimum 15 per cent of the endowment to the recently established Queen’s Climate Action Allocation.
According to the report, this new allocation is comprised of investments towards asset classes—investments grouped by similar characteristics—that are predicted to “outperform” in the transition to a lower-carbon economy.
Amounts from the fund are also withdrawn each year per the University’s Spending Policy. The spending policy helps university programming and ensures the financial security of the university’s assets.
The fund releases income to finance scholarships, academic chairs, book funds, lectureships, and a “diverse range” of university programs. It simultaneously aims to preserve the purchasing power of assets for the future.
Preserving purchasing power of the assets requires the University to incorporate long-term investments that benefit from inflation—by investing in commodities like precious metals, for example. These investments act as a protection against inflation.
The endowment payout—money released from the fund for reasons other than University operations—saw a historic peak at $50 million in 2022. In the report, Keohane referred to the payout rate as “generous,” even during challenging times.
Queen’s donors, such as Rico Garcia ArtSci ’13, shared their reasons for contributing to the fund’s broader societal purpose in the report.
“Today, in a world in desperate need of a more tolerant society, I hope my gifts to Queen’s can help create a welcoming community that sees the strength in cultural diversity.”
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