The average annual total return on investable assets for FY08 for 143 nonprofit healthcare organizations participating in the Commonfund Institute’s 2009 Commonfund Benchmarks Study of Healthcare Organizations was -21.2 percent (net of fees).
This compares with average returns of 8.0 percent for FY07, 10.6 percent for FY06, and 6.3 percent for FY05, and represents by far the lowest return recorded in the seven studies conducted by the Commonfund Institute annually since FY02. The negative FY08 return lowered participating healthcare organizations’ trailing three-year returns to -2.3 percent. Returns were barely positive for the trailing five-year period, at 1.7 percent.
Top decile performers realized an average annual return of -2.2 percent (against an average -21.2 percent return for the study universe) while the top quartile averaged a -8.7 percent return.
For the fourth consecutive year, participating healthcare organizations reported higher debt levels. Overall, debt rose to an average of $681 million in FY08 from $580 million in FY07, $509 million in FY06, and $395 million in FY05. The study also measured debt as a percentage of investable assets. For all participants, debt was an average of 92.1 percent of investable assets in last year’s report. This year, it ballooned to 122.9 percent of investable assets.
The review of the 2008 study and the design for the 2009 report took place in the late winter and spring of 2009. Field interviews with the participating institutions followed in the second and third calendar quarters of 2009.
