Analysis: Which university has the fattest wallet?

July 18, 2003

How has the fall in the value of the stock market since The THES' first analysis of university wealth in 2001 affected the financial health of UK institutions? Claire Sanders and Alison Goddard report.

Cambridge University is still the richest institution in the UK, despite a fall of 26 per cent in the value of its endowments since 2000.

In the second analysis of university wealth by The THES - the first was carried out in 2001 based on 2000 figures - the fall in the value of the stock market can be clearly seen. Bristol University has seen the value of its endowments fall by more than a third.

Others have fared extraordinarily well. Surrey University, which The THES identified in 2000 as one of the up-and-coming wealthy universities, has seen its endowments fall by just 0.1 per cent. Since the publication of the last set of league tables, Surrey has announced that it is looking at plans to go private.

Other institutions that have performed strongly include Reading, Coventry and Wolverhampton universities.

The balance sheets used by The THES were supplied by the Higher Education Statistics Agency and are for the year to July 31 2002. They have been compared with those for July 31 2000.

Net assets

Net assets, or total funds, show the value of an institution's fixed assets such as buildings, its endowment assets and its current assets minus its liabilities. A university's net assets also include whatever it owns in spin-off companies. They reflect the size of a university as well as its wealth.

Cambridge has net assets of just over £1.2 billion, a 0.6 per cent increase on 2000. Oxford University's net assets are smaller at £809 million, a 0.2 per cent increase on 2000. Unlike Cambridge, Oxford does not include buildings more than 50 years old in its fixed assets.

Two years ago, Cambridge estimated that its colleges' net assets amounted to £1.5 billion. Oxford put the figure at somewhere between £1.2 billion and £1.5 billion. Neither university could provide updated estimates.

The ten universities with the biggest assets account for more than 35 per cent of the sector's assets.

The highest ranked new university is Manchester Metropolitan at 16. Leeds Metropolitan, Coventry, Wolverhampton and Brighton universities all come in the top 30.

These all tend to be universities with large student numbers. A spokesperson for Wolverhampton said: "We are in the process of a major building programme, called New Horizons. This has significantly increased our net assets. We are also the tenth largest university in the UK in terms of head count."

The past two years have seen serious swings in the net assets of some universities. The University of East London has seen a fall of 28 per cent, Greenwich University a fall of 19.6 per cent and Heriot-Watt University a fall of 17.4 per cent.

A UEL spokesperson said: "This fall is due to the sale of properties, including Maryland House in Stratford." The university has also changed the basis of the valuation of its Longbridge Road campus.

At the other end of the scale, Exeter University has seen an increase in net assets of 64.4 per cent, York University an increase of 52.8 per cent, Sussex University an increase of 46.6 per cent and London Guildhall University an increase of 40 per cent.

A spokesperson for Exeter said: "The £65 million increase is due to investment in new facilities, particularly the Institute of Arab and Islamic Studies. We have also carried out a revaluation of the university's estate and seen its value go up due to big increases in property and land values in this area."

Exeter is part way through a £100 million investment programme that includes the Peninsula Medical School and the Combined Universities in Cornwall.


Although Surrey has fallen from seventh in 2000 to ninth in this table, it still stands out as a relatively new university that has caught up with older and more-established universities.

Cambridge has by far the largest reserves of any university - despite the fact that they have fallen by 5 per cent since 2000. In 2000, Oxford was just behind Birmingham University but now comes second to Cambridge after its reserves increased 3.7 per cent in the past two years.

Between them, Oxford and Cambridge account for 14.1 per cent of the sector's reserves.

A number of universities have seen significant increases in their reserves, notably UEL, Goldsmiths College, London, Bristol, Nottingham Trent University, and Imperial College London.

A UEL spokesperson said: "We have had much tighter financial control that has led to surpluses in this period." The university's reserves have also been boosted by the profits from the sale of properties and the release of a deferred capital land grant. The big losers over the past two years are Derby University, Greenwich and Heriot-Watt.

A spokesperson for Derby said: "The fall in our reserves is due to the stock-market crash and exceptional restructuring costs."

Reading, which did well in the endowment stakes, comes 15th in this table.

The top new university is Wolverhampton, with reserves of £75 million - an increase of 15.6 per cent on 2000. Other new universities with significant reserves are Manchester Metropolitan, Nottingham Trent, Coventry and Robert Gordon.


As in 2000, Cambridge and Oxford surpass other universities. In July 2002, Cambridge's endowment was worth £490 million, and Oxford's £390 million. Their nearest rival, Edinburgh University, came in at £142 million. Between them, Cambridge and Oxford hold 37.5 per cent of the UK's university endowments.

The fall in the value of the stock market has hit many universities. The stock market peaked in December 1999 and then fell by 47 per cent by October 2002.

Cambridge's endowments fell by 26 per cent between July 2000 and July 2002.

A spokesperson said: "The university has a conservative investment style that means that it does not always gain from the massive highs in the market but, conversely, is protected from the massive lows."

The biggest loser among the Russell Group is Bristol - its endowments fell by a third, from £35 million to £23 million. A spokesperson for Bristol said: "The impact of the fall is not serious because the £23.3 million is spread over some 330 separate endowments. Also, the dividend has remained stable."

Of the Russell Group universities, the London School of Economics weathered the stock-market storm particularly well with a drop of just 3.6 per cent in the value of its endowments.

Outside the Russell Group, Surrey is one of the biggest winners. In 2000 it was noted that the university had come tenth in terms of its endowment wealth - a staggering achievement given that it became a university only in 1966. This time, Surrey has risen to ninth. It has been able to edge up the rankings as it has seen the value of its endowments fall by just 0.1 per cent in the past two years. Its financial position will strengthen the university's push to go private. In January 2003, vice-chancellor Patrick Dowling announced that Surrey was seeking to become independent from government funding.

A spokesperson said: "Our main endowment is our foundation fund, which is essentially the income generated by our research park. So our assets are nearly all in land and the revenue-generating buildings on the land, which will have protected our endowment from rises and falls in stocks and shares."

Reading is another winner. It is just outside the top ten in terms of endowment wealth - coming in at 11th, having seen a fall of just 2.8 per cent since 2000. A spokeswoman said that the university had seen additions to its endowments in this period in land and property. "A single building was donated, worth about £10 million," she said.

Some universities with relatively small endowments have seen big percentage changes. The London Business School has seen its endowment fall by 76 per cent to £4.44 million. Leeds Metropolitan is down 65 per cent and Anglia Polytechnic University is down 57 per cent. Bath University has seen a fall of 39.2 per cent.

The School of Oriental and African Studies, which has a relatively large endowment of just over £14.5 million, has seen its endowment halved.

A spokesperson said the Soas figures were exaggerated by its £8 million Brunei Gallery being included with its endowments in 2000 but listed elsewhere in 2002. Excluding this figure, the fall in the value of endowments is 26 per cent.

Andrew Keble, finance director at Soas said: "The fall was stock-market related and we since changed our fund managers and we're doing much better."

A number of new universities have seen big percentage increases in their endowments - but are starting from a small base. Sheffield Hallam and De Montfort universities top the winners, more than doubling the value of their endowments.

As in 2000, many universities have no endowments at all, including the Open University.


Cambridge tops this table after doubling its liquidity to £237 million. It has gone from just leading the sector to leaving it far behind, but this is in large part due to a change in accounting procedure. Oxford's liquidity has increased by 13.5 per cent to £141 million.

The University of the West of England is the highest new university in this table, coming in seventh with a 48 per cent increase over two years. A spokesperson said: "This is due to buoyant student demand, good financial management and property sales. Over the next five years we plan investments of about £90 million in a number of initiatives."

Days' cover

City University comes top with 217 days' cover. A spokesperson said that the university had recently sold assets for reinvestment purposes: "These funds are being used to improve the university infrastructure by a planned major-capital programme, and we expect our liquidity position to move down towards the sector average in the medium term."

Those with minus figures have depleted their liquid reserves to cover other expenditures. This means that their short-term borrowings exceed their liquid assets.

But this does not mean that they are financially weak because many universities in this position have large net assets. Rather, it shows that they are using short-term financing arrangements in advance of setting up longer-term financing to fund capital expenditures.

University wealth: subscribers click here for the 2003 tables.


  • Net assets show an institution's wealth at any given time
  • Reserves are a university's accumulated surplus since its establishment. They include general endowments and accumulated surpluses.
  • Universities with large reserves are those that have built up surpluses over time and reinvested well. Reserves are equivalent to a company's accumulated profit and a large reserve is seen as a sign of self-sufficiency. Endowments and operating results can push reserves up or down. They are calculated by adding a university's general endowments to its general reserve
  • Endowments are funds donated over years to universities for a special purpose, such as a chair, or for general use. Endowment funds are invested in a variety of assets, including stocks and shares as well as land and property. They are calculated by adding each university's specific and general endowments
  • Liquidity is a measure of the cash a university has as well as what can be turned into cash in the short term. It is calculated by adding each university's investments and cash at bank and in hand and then taking away its overdraft Because institutional liquidity can change overnight, The THES has not done a two-year comparison
  • The days' cover table provides more information on liquidity by allowing for size. A large institution could look as if it has done well in terms of liquidity, but when this is put against expenditure, the picture may not be so rosy. Oxford and Cambridge lose their dominance in this table but are still in the top ten. It is calculated by dividing liquidity by expenditure minus depreciation and multiplying by the number of days in the year
  • Five institutions' accounts reflect the fact they have merged with smaller institutions. They are Cambridge, Imperial College London, Leeds, Hull and Canterbury Christ Church University College. These institutions merged with Homerton College, Wye College, Bretton Hall College, North Riding College and the College of Guidance Studies, respectively.
  • Lancaster and Cranfield universities are excluded throughout this analysis as they do not make their balance sheets public.

Subscribers click here for the 2003 tables.

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