Bowdoin’s Strong Returns Due To Alternatives: Druckenmiller

Bowdoin College, a small, well-known liberal art school, is located in Brunswick, Maine. The top-flight school has small classes, world-renowned faculty and modern, high quality facilities.

Running a well-respected liberal college to this standard is a very expensive endeavor, but Bowdoin is fortunate enough to have a large endowment and a very smart investment committee.

According to hedge fund titan Stanley Druckenmiller, an investment committee member, Bowdoin College’s scintillating endowment return of 14.4% in 2015 was driven by a portfolio including top private equity and hedge funds.

Endowment-chart600 Bowdoin

Druckenmiller says Bowdoin’s CIO deserves most of the credit

Druckenmiller, a billionaire investor who graduated from Bowdoin in the mid-1970s, commented that Paula Volent, the chief investment officer at the liberal arts school, deserves the lion’s share of the credit for the strong endowment returns. He noted that as well as private equity funds that performed very well over the last few quarters, the college had positions in macro hedge funds who had “outsized, outlier returns taking advantage of the decline in oil and currencies.” Druckenmiller refused to provided any specifics on the college’s investments.

“It’s mainly Paula Volent,” Druckenmiller noted in an interview with Bloomberg this week. “She’s done just a phenomenal job.”

More on the remarkable performance of Bowdoin’s endowment

Bowdoin is a top liberal arts college that has benefited for some time from an excellent performance in the investments in its endowment, enabling it to compete with well-heeled with peers including Amherst and Williams. One of the oldest liberal arts colleges in the U.S., Bowdoin was founded in 1794. Alumni of the college include Franklin Pierce, the 14th president of the U.S., several state governors, and perhaps the most famous Bowdoin graduate is American patriot and inventor Benjamin Franklin.

Of note, the net value of the college’s endowment was up by 15% to $1.4 billion for the year through the end of June. In a statement published on Tuesday, Bowdoin noted it had enjoyed an annual average return of 10.5% over the last decade.

“This investment performance is truly remarkable,” Bowdoin President Clayton Rose commented in the statement.

Based on data from Bloomberg, the endowment’s annual and 10-year annualized returns as of fiscal year 2014 were among the top 10 highest in the country.

See the full press release here