Investing in an Era of Uncertainty

John S. Griswold, Jr. Executive Director, Commonfund Institute

| CAIS/NYSAIS | May 2008 Setting the Context | The Market Headlines

ƒ Bursting bubbles and the ripple effects

ƒ Volatility returns with a vengeance

ƒ No more housing ATM card – approximately $2 trillion in “lost” wealth

ƒ “Agflation” – more than just oil is up

ƒ Global growth slows … and hums along

ƒ The “R” word – how slow will we grow?

2 U.S. Real GDP

8%

6%

10% 4%

2%

Quarterly GDP (%) 0% 8% -2% 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 6%

4%

2% 2.50% 1Q08 0%

Percent Change From Quarter One Year Ago Year One Quarter From Change Percent -2% 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: BEA The Housing Sector – Existing Homes – The Great Equalizer

Monthly Data 1/31/1955 - 3/31/2008 Housing Starts (Year-to-Year Change) 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 -10 -10 -20 -20 -30 -30 -40 -40 3/31/2008 = -36.5% 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 90 90 80 80 70 Shaded areas represent National Bureau of 70 60 Economic Research recessions. 60 50 50 40 40 30 30 20 20 10 10 0 0 -10 -10 -20 -20 -30 -30 -40 -40 -50 3/31/2008 = -40.9% -50

(E238) Building Permits (Year-to-Year Change)

Source: Ned Davis Research

| CAIS/NYSAIS | May 2008 Inflation

10% PPI (YoY)

PPI ex Food & Energy (YoY) 8% CPI (YoY)

CPI ex Food & Energy (YoY) 6%

4%

Percent (%) 2%

0%

-2%

-4% Jul 2007 Jul 2006 Jul 2005 Jul 2004 Jul 2003 Oct 2007 Oct 2006 Oct 2005 Oct 2004 Oct 2003 Jan 2008 Jan 2007 Apr 2007 Jan 2006 Apr 2006 Jan 2005 Apr 2005 Jan 2004 Apr 2004 Jan 2003 Apr 2003

Source: BLS

| CAIS/NYSAIS | May 2008 Employment

Black Monday S&L Crisis Mexican Debt Russia/ LTCM NASDAQ Subprime October 19, 1987 1990 Crisis | 1995 1998 Collapse | 2000 Crisis | 2007

10% 4%

3% 8%

e 2%

6%

1%

4%

0% Civilian Unemployment Rat Civilian Nonfarm Payroll Employmen

2% Civilian Unemployment Rate (left axis) -1% Nonfarm Payroll Employment (right axis)

0% -2% 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: BLS

| CAIS/NYSAIS | May 2008 Abundant Liquidity

Global Broad Money Growth (YoY Chg)

Russia M2 49.8% South Africa M3 25.8% Argentina M3 25.1% Brazil M4 22.0% India M3 20.7% Singapore M3 20.6% M2 19.6% China M2 18.5% Australia M3 18.0% Norway M2 17.4% Indonesia M2 17.1% Hong Kong M3 16.9% Philippines M3 14.9% United Kingdom M4 13.7% MZM 11.8% Eurozone M3 11.6% Czech Republic M2 11.4% Korea M3 10.3%

Source: ISI

7 World Economic Growth

15% World USA Japan EU 15 Emerging countries China Latam

10%

5%

0%

-5% 2002 2003 2004 2005 2006 2007 2008

Source: Commonfund, OECD, Wellington updated March 2008

| CAIS/NYSAIS | May 2008 What’s Different This Time? The Mix of World GDP

1995 2007

Italy France 4% United 5% Kingdom 4% Other developed 14% United States 26%

Germany Japan 9% 8%

Developing Gaining in Economies Importance Developing 22% Economies 6% 34% Japan United 18% Kingdom 5% United States 24% France 4% Other developed Italy 13% 4%

Source: ISI

| CAIS/NYSAIS | May 2008 The Global Growth Dichotomy

20 ISI Developing Economies 15 Strength minus Weakness Economic 10 Diffusion Index

5

0

-5

15

10

5 ISI Developed 0 Economies Strength minus -5 Weakness Economic Diffusion Index -10

-15 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: ISI P/E by Region

S&P 500

M SCI United Kingdom MSCI Japan M SCI Europe Ex-United Kingdom

MSCI Emerging Markets 19.5x 19.1x 19.0x 18.8x 18.3x 17.3x 16.8x 16.8x 16.8x 15.9x 15.8x 15.8x 15.8x 15.7x 15.5x 15.1x 15.0x 14.9x 14.9x 14.5x 14.5x 13.8x 13.4x 13.3x 13.3x 13.1x 12.8x 12.7x 12.7x 12.2x 12.0x 10.8x 10.7x 10.3x 9.4x Multiples FY 1) (P/E

12/31/02 12/30/03 12/31/04 12/30/05 12/29/06 12/31/07 3/31/08

Source: FactSet The Numbers Behind the Headlines Slowing Global Growth

11.4% 2007

10.0% 2008 9.8%

8.5%

3.1% 2.6% 2.2% 1.7% 1.8% 1.5% 1.2% 1.3%

U.S. Japan UK Europe ex-UK China BRICs

Source: JP Morgan The Numbers Behind the Headlines “Agflation” – commodity prices beyond oil

13 The Numbers Behind the Headlines The return of volatility

180 50 MOVE Index (left axis)

160 VIX Index (right axis) 45

40 140

35 120 30 100 25 VIX

MOVE 80 20 60 15

40 10

20 5

0 0 9/1/1998 3/1/1999 9/1/1999 3/1/2000 9/1/2000 3/1/2001 9/1/2001 3/1/2002 9/1/2002 3/1/2003 9/1/2003 3/1/2004 9/1/2004 3/1/2005 9/1/2005 3/1/2006 9/1/2006 3/1/2007 9/1/2007 3/1/2008

Source: Bloomberg The Numbers Behind the Headlines The return of volatility

Daily Change in S&P 500 Index

140 Number of Days +/- 1% 125 Number of Days +/- 2% 120

105 102 100 92

82 81 79 80

60 52 49

Number of Days Per Year 41 38 40 37 30 29 23 23 25 20 17 20 13 15 15 15

3 0 002 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1Q 2008

Source: Bloomberg The Numbers Behind the Headlines Risk is no longer free and spreads have widened

U.S. Credit Basis Basis Basis Swaps Points U.S. Mortgage Backed Securities Points Points

270 330 80 250 280 230 75 210 230 70 190 65 170 180 150 60 130 130 55 110 80 90 50 Jul 07 Jul Jan 07 Jan 08 Nov 07 Mar 07 Mar 08 Mar Sep 07 May 07 May Jul 07 Jul Jan 07 Jan 08 Nov 07 Mar 07 Mar Mar 08 Mar Jun 07 Sep 07 Mar 07 Mar Mar 08 Mar May 07 May Dec 06 Sep 07 Dec 07

Basis Basis Basis Points Agencies Emerging Markets Points U.S. Corporate High Yield Points 100 920 340 90 320 820 80 300 720 280 70 620 260 60 240 520 220 420 50 200 40 180 320 160 220 30 140 Jul 07 Jul Jul 07 Jul Jul 07 Jul Jan 08 Jan 08 Jan 07 Jan 07 Jan 07 Jan 08 Nov 07 Nov 07 Nov 07 Mar 08 Mar Mar 07 Mar Mar 08 Mar Mar 07 Mar Mar 07 Mar 08 Mar Sep 07 Sep 07 Sep 07 May 07 May May 07 May May 07 May

Source: Bloomberg, Lehman Live High Yield Credit Spreads

1,200 +198% +22% +30% +52% June 2007 to +101% 1,000 March 2008 +150% 800

600 +69% 400

200 Mar 1997 Mar 1998 Mar 1999 Mar 2000 Mar 2001 Mar 2002 Mar 2003 Mar 2004 Mar 2005 Mar 2006 Mar 2007 Mar 2008 Sep 1997 Sep 1998 Sep 1999 Sep 2000 Sep 2001 Sep 2002 Sep 2003 Sep 2004 Sep 2005 Sep 2006 Sep 2007 Sep

1,000

800

600

400

200 Jul 2007 Oct 2007 Jan 2008 Jun 2007 Feb 2008 Mar 2008 Mar 2007 Apr 2007 Sep 2007 Sep Nov 2007 Dec 2007 Aug 2007 Aug May 2007

Source: Bloomberg Housing Price Appreciation …. Depreciation

15.8% Price Decline

250 25% S&P Case-Shiller Home Price Index from June 2006 to February 2008

6.8% Price Decline 20%

200 from October 1989 to April 1991 15%

10%

150 5%

0% Index Level 100

-5% Year over Year Change (%) Change Year over Year

-10% 50

Composite-10 -15% Year over Year Change

0 -20% 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: Standard & Poor’s Cumulative Inflation-Adjusted Performance 70% S&P 500, 30% Lehman Aggregate and 5% Spend

Real Value using CPI as the Deflator

Real Value using HEPI as the Deflator

Time Period – 42 Years

Source: Ibbotson, Bloomberg, Commonfund Institute The equity portion of the hypothetical portfolio is based on monthly returns of the S&P 500 Index (12/65-2/08), and the fixed income portion is based on monthly returns of the Lehman Brothers Aggregate Index (01/73-2/08) and the Ibbotson Associates Long Term Corporate Bond Index (12/65-12/72). HEPI data from 07/06 to 2/08 is estimated using the Commonfund Institute method based on regression analysis. Returns for this hypothetical portfolio assume that it is rebalanced to 70/30 annually on 1/1/yy and 5% is distributed annually on 1/1/yy.

| CAIS/NYSAIS | May 2008 Return/Risk 10 Year Period Ending December 31, 2007

Source: Style Advisor; Altvest The following are the indices used by asset class: U.S. Government Bonds, Lehman Aggregate Bond Index; U.S. High Yield Bonds, Merrill Lynch High Yield Master II; International Bonds, Citigroup World Govt’ Bond Index; U.S. Large Cap Equities, S&P 500 Index; U.S. Small Cap Equities, Russell 2000 Index; International Equities, MSCI World Ex-US Index; Private Real Estate, NCREIF; Private Capital, Venture Economics (10 years through 9/30/2007); Emerging Markets Equities, MSCI EMF Index; Distressed Debt, HFRI Distressed Securities Index; Hedge Strategies, HFRI Equity Hedge Index; Commodities, Dow AIG Commodity Index

| CAIS/NYSAIS | May 2008 The Power of Diversification

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Venture capital 49.2% 42.7% 33.0% 26.7% 185.9% 31.8% 13.9% 25.9% 40.0% 31.6% 21.4% 35.1% 16.2%

S&P 500 Index 34.1% 35.3% 31.0% 19.0% 71.6% 26.4% 12.2% 19.5% 37.1% 20.8% 20.6% 26.2% 12.9%

Private equity 31.9% 34.5% 27.2% 19.0% 44.2% 24.3% 8.9% 10.3% 26.4% 17.3% 15.0% 20.7% 11.7%

Hedged Equity 31.0% 24.8% 23.4% 16.0% 28.4% 13.4% 8.4% 7.4% 25.3% 15.1% 12.3% 18.3% 11.0%

Global Macro 29.3% 23.2% 21.2% 15.3% 24.3% 11.6% 6.9% 5.4% 23.9% 15.0% 12.2% 15.3% 10.7%

Event Driven 25.1% 21.8% 20.3% 15.1% 24.3% 10.8% 0.4% 3.8% 21.4% 10.4% 10.7% 13.6% 9.0%

Cirigroup World Govt Bond Index 19.0% 20.3% 18.8% 8.7% 19.5% 9.1% -1.0% -4.3% 20.5% 9.1% 7.3% 12.4% 7.0%

Lehman Agg Bond Composite Index 18.5% 14.5% 15.9% 6.2% 17.6% 6.7% -13.0% -4.7% 18.3% 9.0% 6.1% 11.7% 6.9%

Relative Value Arbitrage 15.7% 9.3% 9.7% 2.8% 14.7% 2.0% -19.5% -12.7% 14.9% 7.4% 6.0% 8.5% 5.5%

NAREIT Equity Index 15.3% 7.2% 2.6% 1.7% -0.8% 1.6% -20.7% -15.5% 9.7% 5.6% 3.0% 6.1% -15.7%

Natural Resources (DJ AIG) 15.2% 3.6% 0.2% -17.5% -4.3% -10.1% -21.2% -23.4% 6.6% 4.4% 2.4% 4.3% N/A

MSCI World (ex-US) Index 11.8% 3.6% -3.4% -27.0% -4.6% -13.2% -34.2% -29.4% 4.1% 4.3% -6.9% 2.1% N/A

Sources: Bloomberg, HFRI, Venture Economics Educational Endowment Report

Data customized for Independent Schools in CT , NY

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 16 18 19 20 21

Prepared March 2008 08 Copyright 2008 The Common Fund for Nonprofit Organizations. All rights reserved. "Commonfund" and "Commonfund Benchmarks Study" are trademarks of The Common Fund for Nonprofit Organizations. No part of this material may be used without the express written permission of The Common Fund for Nonprofit Organizations. The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited Demographics

„ 8th Annual Study

„ 767 Participating institutions − 370 Private colleges and university endowments − 209 endowments − 62 Public system funds − 126 State institution-related foundations (SIRF)

„ $341 billion in assets − 56 institutions over $1 billion − 44 institutions between $501 million - $1 billion − 210 institutions between $101 million - $500 million − 106 institutions between $51 million - $100 million − 246 institutions between $10 million - $50 million − 105 institutions under $10 million

NOTE: Based on data of 767 interviews. The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 2 About This Analysis

This custom analysis has been prepared from data collected in the 2008 Commonfund Benchmarks Study® on Educational Endowment. The data herein are for the exclusive and internal use of Independent Schools and Commonfund. To create this analysis, the following institutions were selected from among the study participants:

IdIndepen dent ShSchoo ls in CTNYCT, NY

Choate Rosemary Hall Foundation Woodstock Academy Foote School Association American Community School of Beirut Convent of the Sacred Heart Hamden Hall Country Day School De La Salle Academy Corporation Emma Willard ScSchoolhool Miss Porter's School Poly Prep Country Day School M ooreland Hill School Poughkeepsie Day School New Canaan Country School Riverdale Country School The Buckley School Putnam Indian Field School The Hewitt School The Loyola School The The Nightingale-Bamford School The The Stony Brook School The West Side Montessori School The Loomis Institute The Montessori School The WtWestover ShlSchool

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 3 About This Analysis – (continued)

Total Independent Schools

Albuquerque Academy Community Music Center American Community School of Beirut Convent of the Sacred Heart School of New York Greenhill School Atlanta Speech School Crossroads School-Vanguard School Greenhills School BlBelmont tD Day S Shchool CtlSiUldShlCrystal Springs Uplands School GbDShlGreensboro Day School Currey Ingram Academy Greenwich Academy Blair Academy Breck School Grumman Hill M ontessori Association, Inc. Darlington School Hamden Hall Country Day School Briarwood-Brookwood, Inc. De La Salle Academy Hanahau'oli School De La Salle Institute Hanna Boys Center Harpeth Hall School Brophy College Preparatory Delaware Valley Friends School Harvard-Westlake School Buckingham Browne & Don Bosco Technical Institute Hawaii Preparatory Academy Capitol Hill Day School Dunn School Hawken School Durham Academy Hewitt School Center for Early Education Eastside College Preparatory School CFS - The School at Church Farm Emma Willard School Holland Hall School Charles Armstrong School Far Brook School Holy Child Academy Charles Wright Academy Hotchkiss School Charlotte Latin School Friends Academy Ignatian Corporation Chestnut Hill Academy Friends' Central School Corp International School of the Peninsula Cheverus High School Garrison Forest School, Inc Jesuit College Preparatory School of Dallas Fnd., Inc Christian Brothers High School George School John Burroughs School Collegiate School Georgetown Day School Kamehameha Schools Colorado Academy Germantown Friends School Kent Place School Columbus School for Girls Gilman School, Inc. Kent School Corporation

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 4 About This Analysis – (continued)

Total Independent Schools

Kents Hill School Peninsula School, Ltd. La Jolla Country Day School La Pietra Hawaii School for Girls Phoenix Country Day School Southfield School LkLake F orest tA Acad emy Pine C rest S ch ool SiSpringsid idShle School Lakeside School Piney Woods Country Life School St. Andrew's School Lamplighter School Poly Prep Country Day School St. Andrew's School of Delaware, Inc. Laurel School Polytechnic School St. Anne's - Belfield School Lick-Wilmerding High School Pomfret School St. Francis High School Marlborough School Poughkeepsie Day School St. George's School Marshall School St. Gregory College Preparatory School Mary Institute and Saint Louis Country Day School St. John's Country Day School Maumee Valley Country Day School Providence Day School St. Johnsbury Academy McDonogh School Punahou School St. Paul Academy and Summit School Mercersburg Academy Putnam Indian Field School Starr Commonwealth Metairie Park Country Day School Rabun Gap-Nacoochee School Rehoboth Christian School The Altamont School Midland School Riverdale Country School The Asheville School Rohan Woods School The Baylor School, Inc. Miss Porter's School Sacred Hearts Schools - Atherton The Beaver Country Day School Monte Cassino School, Inc. Saint James School The M ooreland Hill School Saint M ary's Hall The Buckley School, NY New Canaan Country School Salisbury School The Bullis School Norfolk Academy Sandia Preparatory School The Bush School Northfield Mount Hermon School School SantaCatalinaSchoolSanta Catalina School The Foundation Foundation, Inc Inc. Oldfields School, Inc Schools of the Sacred Heart The College Preparatory School Oregon Episcopal School Seattle Country Day School The Dexter School

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 5 About This Analysis – (continued)

Total Independent Schools

The Dominican Sisters of San Rafael The Pingry Corporation (School) Woodward Academy The Elisabeth Morrow School The Potomac School The Episcopal School of Dallas The Putney School The Eth el W alk er S ch ool The S even Hill s S ch ool The Foote School The Steward School The Forman School The Stony Brook School The Gladwyne Montessori School The Summit School The Governor's Academy The Taft School The Hamlin School The Thacher School, Inc. The Hill Center The Vanguard School The Webb School The Hillside School The Westminster Schools The Key School The Williston Northampton School The The Woods Schools The Loomis Institute University School The Loyola School University School of Milwaukee Endowment Fund The Madeira School, Inc. Ursuline Academy of Dallas The Nightingale-Bamford School The Orchard School Wayland Academy The Orme School Waynflete School West Side Montessori School The Peck School Western Reserve Academy The Peddie School , Inc The Pegasus School Wilmington Friends School , Inc Inc. The Pembroke Hill School Woodberry Forest School The Pennington School Woodstock Academy

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 6 The Benchmark Leaders TopppQpf Decile and Top Quartile performers

Demographics – Fiscal Year 2007 Top Decile Top Quartile Total Institutions TtlITotal Instit tittiutions 72 181 767 Private 44 116 370 Independent 14 29 209 All Publics 14 36 188

Note: Top decile and top quartile are defined as the top 10 percent and 25 percent of 719 institutions that provided returns data.

Asset Allocation Comparison1 – Fiscal Year 2007 Average Reported Returns: One-, Three- and Five-Year

Total Institutions Top Decile Top Quartile 25 22.6 Total 20.8 3 Top Decile 1 1 Top Quartile 20 16.9 16.5 15.2 14.1 15 12.8 13.1 23 17 20 11.5 42 10 12 52 47 11 10 20 20 21 (%) Percent 5

0 Domestic equities Alternative strategies FY2007 net 3-year return 5-year return Fixed income Short term securities/cash/other annual total International equities return

1Dollar-weighted Past performance is no guarantee of future results. Unless otherwise indicated, all performance information reflects net total returns.

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited. Independent Schools in CT, NY 7 Average One-, Three- and Five-Year Returns

Numbers in Percent (%)

Total Independent Total Independent Schools Schools in CT, NY (767) (209) (32)

FY2007 total return 16.9 15.6 15.5

3-year return 12.8 11.9 12.3

5-year return 11.5 10.9 11.1

Note: More than 90% of participating Institutions (719 of the 767 participants) provided return data for the most recent fiscal year, nearly three-quarters (559 institutions) provided three-year return data and more than two-thirds (509 institutions) provided five-year return data. Return data cited in this report represent the average returns for institutions providing data for each period.

„ Among the Total Institutions group in the Study, an average return of 16.9% was reported for FY 2007 (net of fees). For the three -year period , the average return was 12. 8% and for the five-year period , the average return was 11. 5%.

„ Among Total Independent Schools, an average return of 15.6% was reported for FY 2007, modestly higher than Independent Schools specifically in CT and NY, though lower than that of Total Institutions. For the three-year period, the average return was 11.9% and for the five-year period, the average return was 10.9%, both lowest among constituencies.

„ Among Independent Schools in CT, NY, an average return of 15.5% was reported for FY 2007, slightly lower than all other constituencies. For the three-year period, the average return was 12.3% and for the five-year period, the average return was 11.1%.

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 8 Asset Allocations1 for Fiscal Year 2007

Numbers in Percent (%)

Total Independent Total Independent Schools Schools in CT, NY (767) (209) (32) Asset Class

Domestic equities 23 26 24

Fixed income 12 14 15

International equities 20 19 13

Alternative strategies 42 39 44

Short-term securities/cash/other 324

1Dollar-weighted „ Average FY 2007 asset allocation among the Total Institutions group was 42% to alternative strategies, 23% to domestic equities, 20% to international equities, 12% to fixed income and 3% to cash/short-term investments.

„ Average FY 2007 asset allocation among Total Independent Schools was 39% to alternative strategies (lowest among constituencies), 26% to domestic equities (highest among constituencies), 19% to international equities, 14% to fixed income and 2% to cash/short -term investments.

„ Average FY 2007 asset allocation among Independent Schools in CT, NY was 44% to alternative strategies (highest among constituencies), 24% to domestic equities, 15% to fixed income (slightly higher than all other constituencies), 13% to international equities (lowest among constituencies) and 4% to cash/short-term investments (modestly higher than all other constituencies).

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 9 Alternative Strategies Asset Mix1 for Fiscal Year 2007

Numbers in Percent (%)

Total Independent Total Independent Schools Schools in CT, NY Responding institutions (()644) (()164) (()26)

Private equity (LBO's, mezzanine, M&A funds and international 19 8 7 private equity) Marketable alternative strategies (hedge funds, absolute return, market neutral, 48 41 73 long/short, event-driven and derivatives) Venture capital 724

Private equity real estate (non campus) 14 37 1

Energy & natural resources (oil, gas, timber, commodities and managed futures) 10 10 15

Distressed debt 22

1Dollar-weighted „ Within the Total Institutions group’s alternative strategies assets, almost half (48%) are allocated to marketable alternative strategies, with 19% allocated to private equity, 14% to private equity real estate and 10% to energy and natural resources.

„ Of their FY 2007 alternative strategies assets, Total Independent Schools reported average allocations of 41% to marketable alternative strategies (lowest among constituencies), 37% to private equity real estate (significantly higher than all other constituencies), 10% to energy and natural resources and 8% to private equity.

„ Of their FY 2007 alternative strategies assets, Independent Schools in CT, NY reported average allocations predominantly to marketable alternative strategies (73%), notably higher than all other constituencies, followed by energy and natural resources (15% - highest among constituenci es) and pri vat e equit y (7% - ltlowest among constit titi)uencies).

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 10 Average Annual Spending Rate for Fiscal Year 2007

Numbers in Percent (%)

Total Independent Total Independent Schools Schools in CT, NY Responding institutions (767) (209) (32)

FY 2007 spending rate 4.4 4.1 3.4

„ Among the Total Institutions group, FY 2007 spending rates averaged 4.4%.

„ Among Total Independent Schools, FY 2007 spending rates averaged 4.1%, modestly lower than that of Total Institutions.

„ Among Independent Schools in CT, NY, FY 2007 spending rates averaged 3.4%, notably lower than all other constituencies.

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 11 Spending Policy1 for Fiscal Year 2007

Numbers in Percent (%)

Total Independent Total Independent Schools Schools in CT, NY (767) (209) (32)

Spend all current income 243

Percentage of moving average 75 74 59 Average percentage 4.8 4.6 4.5 Decide on appropriate rate each each year year 9 10 16

Grow distribution at a pre-determined inflation rate 1

Spend a pre-specified percentage of beginning market rate 5716 Average pre-specified percentage 4.5 4.6 4.7 LtLast year' s spendi ng pl us i ifltinflation with ith upper and dl lower b band ds 33

Weighted average or hybrid method (Yale/Stanford rule) 55

Other 8919

1Multiple responses allowed „ Among the Total Institutions group, 75% reported a spending policy based on a percentage of a moving average, with the average percentage being 4.8%.

„ Among Total Independent Schools, 74% reported a spending policy based on a percentage of a moving average, with the average percentage being 4.6%, while 10% decide on an appropriate rate each year.

„ Among Independent Schools in CT, NY, 59% reported a spending policy based on a percentage of a moving average, considerably lower than all other constituencies, with the average percentage being 4.5% (lowest among constituencies), while 16% decide on an appropriate rate each year as well as spend a pre-specified percentage of beginning market rate (with the average percentage being 4.7%), both notably higher than all other constituencies.

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 12 Growth from Investment Returns

Numbers in Percent (%)

Total Independent Total Independent Schools Schools in CT, NY Responding institutions (590) (163) (26)

% of endowment growth from investment returns 75.4 73.8 71.6

„ The Total Institutions group reports an average 75.4% of endowment growth from investment returns during FY 2007.

„ Total Independent Schools report an average 73 .8% of endowment growth from investment returns during FY 2007.

„ Independent Schools in CT, NY report an average 71.6% of endowment growth from investment returns during FY 2007, slightly lower than all other constituencies.

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 13 Average Amount of New Gifts to Endowment for Fiscal Year 2007

Total Independent Total Independent Schools Schools in CT, NY (689) (196) (28)

Average total amount of new gifts to endowment for FY 2007 (in $ millions) 8.0 1.9 3.5

„ Among the Total Institutions group, total amount of new gifts to endowment averaged $8.0 million for FY 2007.

„ Among Total Independent Schools , total amount of new gifts to endowment averaged $1. 9 million for FY 2007, considerably lower than all other constituencies.

„ Among Independent Schools in CT, NY, total amount of new gifts to endowment averaged $3.5 million for FY 2007, somewhat higher than Total Independent Schools, though notably lower than that of Total Institutions.

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 14 Average Number of Managers Used by Asset Class for Fiscal Year 2007

Average Number of Managers Used

Total Independent Total Independent Schools Schools in CT, NY (767) (209) (32)

Domestic equities 3.8 2.6 2.5

Fixed income 1.9 1.6 1.6

International equities 2.8 2.0 2.0

Alternative strategies (direct) 15.8 6.8 8.7

Alternative strategies (fund-of-funds) 3.2 2.8 2.4

Note: The total number of managers may rereflectflect multiple mandates by a single manager.

„ Among the Total Institutions group, an average 15.8 separate individual managers are utilized for direct investments in alternative strategies, while an additional 3.8 are used for domestic equities.

„ Among Total Independent School, an average 6.8 separate individual managers are utilized for direct investments in alternative strategies, lowest among constituencies, while an additional 2.8 are used for fund-of-funds investments in alternati ve s trat egi es.

„ Among Independent Schools in CT, NY, an average 8.7 separate individual managers are utilized for direct investments in alternative strategies, notably higher than that of Total Independent Schools, while an additional 2.5 are used for domestic equities, modestly lower than that of Total Independent Schools.

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 15 Professional Staffing of Investment Function for Fiscal Year 2007

Average Number of FTEs

Total Independent Total Independent Schools Schools in CT, NY (767) (209) (32)

Average number of full-time equivalents 1.4 0.8 0.5

„ Among the Total Institutions group, an average 1.4 full-time equivalents (FTEs) are reported staffing the investment function.

„ Among Total Independent Schools, an average 0.8 FTEs are reported staffing the investment function, somewhat lower than that of Total Institutions.

„ Among Independent Schools in CT, NY, an average 0.5 FTEs are reported staffing the investment function, lowest among constituencies.

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 16 Investment Committee Credentials for Fiscal Year 2007

Average Number

Total Independent Total Independent Schools Schools in CT, NY (767) (209) (32)

Average number of voting IC members 7.7 7.0 7.0

Average number that are investment professionals 4.3 4.4 5.2

Average number with specific experience in alternative strategies 3.1 3.1 3.6

„ Among the Total Institutions group, the average investment committee size is 7.7 members, of whom an average 4.3 are investment professionals and an average 3.1 have specific experience in alternative strategies.

„ Among Total Independent Schools, the average investment committee size is 7.0 members, of whom an average 4. 4 are investment professionals and an average 3. 1 havhavee specific experience in alternative strategies.

„ Among Independent Schools in CT, NY, the average investment committee size is 7.0 members, of whom an average 5.2 are investment professionals and an average 3.6 have specific experience in alternative strategies, both highest among constituencies.

The data provided herein is strictly confidential and is for the sole and internal use of Independent Schools in CT, NY and Commonfund. Dissemination to other parties is prohibited.

Independent Schools in CT, NY 17 Financial Resources

Endowment GIFTS

Deferred Annual Giving Asset Allocation

Campaigns

Performance

| CAIS/NYSAIS | May 2008 Financial Resources

Endowment Facilities GIFTS New Deferred State Support Annual Investments Giving Asset Allocation New PPE Capital Debt Campaigns Renewal Net Assets Debt Performance DEBT POLICY Spending Spending POLICY Tuition and Fee Rates Endowment Income Interest Fixed/ Variable State Current Use Gifts Depreciation Support Grants and Contracts Space and Occupancy Financial Aid Policies Other Income Revenue Supplies & Others Housing Expense Headcount Academic State Support, Operations Programs Compensation Tuition & Fees, and Benefits Pay Scales Room & Board Enrollment Plan Design Cost Sharing

Revenues Expenses

| CAIS/NYSAIS | May 2008 Governance Hot Buttons

Spending Policies ƒ Current inquiry by Senate Finance Committee – possibility of mandatory spending legislation? ƒ Media attention ƒ Should boards revisit this area? ƒ Principal concerns: ƒ Intergenerational equity ƒ Legal issues – prudence; UMIFA/UPMIFA; donor restrictions

Nonprofit Self Regulation ƒ Nonprofit leaders have called for more, in response to threat of Congressional action ƒ Unclear where this will lead at present – different nonprofit sectors have very different issues

| CAIS/NYSAIS | May 2008 Governance Hot Buttons

Transparency ƒ Recent Amendments To Form 990 ƒ Websites as vehicle for providing transparency to governance matters

Donor Restrictions ƒ Donors become much more active in this area ƒ Princeton case (Robertson v. Princeton)

Best Practices – Evolving Standards ƒ Whistleblower/Anti-Retaliation Policies ƒ Mandatory In Financial/Audit Matters (Sarbanes Oxley) ƒ Conflict of Interest Policies ƒ IRS expectation of written policies ƒ Each institution should tailor to its own circumstances ƒ Gifts & Entertainment/Travel Policies ƒ Compensation Review

| CAIS/NYSAIS | May 2008 The New Form 990 and Disclosure of Best Practices

ƒ Governance policies

ƒ Interested director transactions

ƒ Review of compensation

ƒ Endowment spending

ƒ Joint ventures

ƒ Compliance with law

ƒ Board review of the 990 Trends

Financial ƒ Scarcity in food, energy, other? ƒ Inflation demand driven ƒ Returns will be uncertain at best

Demographic ƒ Regional variation in growth/decline ƒ Incomes still growing ƒ Ethnic shifts pronounced

Educational ƒ “Haves” and “have-nots” ƒ For-profits, distance learning, “YouTube generation” ƒ Globalization

| CAIS/NYSAIS | May 2008 Proactive Steps

ƒ Develop a long range financial plan; assets, spending, debt and balance sheet

ƒ Develop and institutional risk management plan

ƒ Use for Form 990 as a communication tool

ƒ Review your bylaws and all policies

ƒ Communicate with your constituents

ƒ Establish relationships with local media and policy makers (local, state, federal)

| CAIS/NYSAIS | May 2008 Market Outlook Disclaimer

Statements concerning Commonfund Group’s views of possible future outcomes in any investment asset class or market , or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Commonfund Group fund. Such statements are also not intended as recommendations by any Commonfund Group entity or employee to the recipient of the presentation. It is Commonfund Group’s policy that investment recommendations to investors must be based on the investment objectives and risk tolerances of each individual investor. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund Group. Commonfund Group disclaims any responsibility to provide the recipient of this presentation with updated or corrected information.