2019-2020 ENDOWMENT REPORT 1 InIn August August, 2019, 2019, 23 23 Global Global StudentStudent Impact Impact Fellows Fellows arrivedarrived in in Sierra Sierra Leone, Leone, Africa,Africa, to to conduct conduct field field work workon projects on projects designed designed to fight tohunger fight andhunger disease and diseaseand andincrease increase global global awareness awarenessof health crises. of health While crises. their Whileresearch their and research projects and varied, projectsthe Lehigh varied, students the Lehigh had a studentsshared goal—sustainable had a shared goal —impact. sustainable impact. 2 Dear Alumni and Friends, Dear Alumni and Friends, An institution cannot rise The Endowment earned +0.7 percent for fiscal year 2020, net of all to great heights without fees. This year has been a challenging environment for investing with a strong foundation. For global equity markets sharply declining 34 percent over 24 trading Lehigh, a critical part of days only to be followed by a precipitous rally with equity markets that foundation is the surging 38 percent through fiscal year-end. With the increased Tower Society. level of market uncertainty, it was constructive to see the overall portfolio weathering the market volatility and end the fiscal year in The Tower Society was positive territory. founded 30 years ago to recognize all who Positive performance was generated across the absolute return, have supported Lehigh, private equity and treasury/cash portfolios although offset by negative including its endowment, performance from our public equity portfolio. The portfolio benefited with a current or deferred from both opportunistic and diversifying strategies, which were able planned gift. Endowed to generate positive performance as volatility increased to historically funds, made possible high levels. Additionally, we were able to capitalize on technical selling by you and other generous benefactors, fuel life-changing by deploying capital at trough prices and repositioning the portfolio for a recovery across different scholarships, innovative academic programs, hands-on learning asset classes. experiences, and research opportunities for incredibly talented The portfolio continues to maintain an overweight allocation to US, growth-oriented securities with an students. Moreover, our endowment supports not only today’s underweight allocation to cyclical sectors including financial services, energy, and materials. We remain students, but generations yet to come. It is on this foundation cautious as we enter the new fiscal year at record-breaking levels in the equity markets and credit spreads that Lehigh’s greatness continually builds. that have tightened back to pre-March levels. We have continued to rebalance our equity portfolio down with But the Tower Society represents more than just financial positive performance and maintain an overweight allocation to liquid and defensive assets that will allow us to strength. It is a community composed of individuals who care capitalize on any new periods of increased market volatility. deeply about the future of Lehigh University and its students. We We maintain an asset allocation framework that provides flexibility to take advantage of opportunities across are passionate and dedicated, and our personal commitment is different asset classes. Our attention today has been focused on areas of the market less dependent what truly lies at the heart of Lehigh’s strength. on timing surrounding the eradication of COVID-19 and more on areas that will continue to benefit from While we have not been able to gather in person this year as a structural innovation. society, I hope that, as you read this report, you will reflect on the In a low interest-rate environment, we are cognizant of return compression and have sought out opportunities impact you have had on Lehigh and take pride in the foundation less correlated to the economic cycle with higher margins of safety and greater underlying collateral. As you have helped to build. we may be entering a new paradigm where historical information could be less predictive in assessing Thank you for all you do for Lehigh. underlying company performance or collateral protection, we believe flexibility and a willingness to adapt our portfolio are more important than ever. Sincerely, Thank you for your ongoing support of the Lehigh endowment and the very important role it plays in Mike Caruso ’67 advancing Lehigh’s strategic priorities and programs. Chair, Tower Society Kristin Agatone Chief Investment Officer Cover: Experiential learning is at the heart of every Lehigh student's curriculum, regardless of the degree they pursue. 3 The women's basketball team had a successful year and went all the way to the Patriot League Semifinals when their season ended. Had it not been for the COVID-19 pandemic, they would have continued to strive for a spot in the championship. 4 Table of Contents GO: The Campaign for Lehigh An Update ............................6 Endowment Perspective .............................................................8 Value of the Endowment ...............................................................9 Endowment Overview .................................................................10 Rob Weisstuch and Faith Glazier: Sharing a Love of Lehigh ....................................................... 12 Board of Trustees......................................................................... 14 Contact Us ..................................................................................... 15 Tower Society Members ............................................................ 16 5 The COVID-19 pandemic didn't stall research at Lehigh for long. Graduate students have resumed their work while taking the necessary precautions to ensure the health and safety of the entire community. GO: THE CAMPAIGN FOR LEHIGH AN UPDATE 6 One of the last beams put in place on the ehigh University forges students into leaders who Health, Science, and Technology (HST) building are prepared to navigate unforeseen challenges and was signed by more than 4,400 members of the Lsolve unexpected problems. The value of instilling Lehigh community in September 2020. students with this kind of nimble, resilient mindset is more apparent now than ever before, as our world faces a global pandemic and a rapidly changing social, economic, and political landscape. As an institution, Lehigh embraces the same tenets it seeks to impart to its students: agility, problem-solving, and a relentless drive to take action and make an impact. Even as the university manages through difficult times, this approach allows us to make progress toward our ambitious goals to grow our intellectual footprint, evolve LET'S GO! our campus, and continually enhance the learning and living experience that fuels student success. We invite you to share in our most recent research questions and will also provide a home for How have we moved forward? Our new College of Health accomplishments and milestone moments of the new College of Health. With the building close has launched. The Health, Science, and Technology (HST) GO: The Campaign for Lehigh: to completion, more than 4,400 alumni, faculty, building is well underway. We continue to enroll students students, staff, and friends demonstrated their with extraordinary talents, and we continue to provide them The College of Health excitement and support by lending their signatures to with a distinctive experience that will help ensure they With an emphasis on data science and innovation, a steel beam that was incorporated into the building’s develop into compassionate, capable leaders. Lehigh’s unique college will train students to frame. The building is slated to open in 2021. understand the factors that influence the health of While the university will surely be changed as our world populations — a critical skill set during the age of Financial Aid and Scholarships and the landscape of higher education shifts, we know COVID-19. With a $5 million gift to fund a chair for Since the start of the campaign, which identifies Lehigh will emerge as an even stronger, more influential Lehigh’s new College of Health, Ellen and Vincent financial aid as its top priority, 235 endowed institution. We have this confidence because of you. Forlenza ’75 are investing in that college’s future scholarships have been established. Support for Your generosity to the endowment put into place the and seeking solutions for health care issues that students is a key factor in recruiting and retaining unassailable resources we depend on, especially in affect populations around the country and the world. ambitious and creative students for Lehigh. This is these uncertain times. Thank you for your generosity The Ellen and Vincent Forlenza ’75 Chair in Health especially true as national demographics prompt and commitment. Innovation and Technology Endowed Fund will enable greater competition for student talent and as the the college to recruit the very best talent in a fiercely need for financial aid increases. competitive market. For more information about Lehigh’s priorities Health, Science & Technology Building and GO: The Campaign for Lehigh, visit Known as HST, the new facility will offer a cutting- GOcampaign.lehigh.edu. edge collaborative environment where people from diverse disciplines can work together on complex 7 Endowment Perspective When Asa Packer founded Lehigh University in 1865, he realized that a solid financial base was necessary if his vision