By Gregory Childress

gchildress@heraldsun; 918-1046

CHAPEL HILL — The UNC endowment suffered losses totaling $441 million in fiscal year 2009 in what officials described as one of the worst years on record for university endowments.

Jon King, president and CEO of UNC Management Co., which oversees the endowment, told trustees earlier this week that a 19.6 percent loss reduced the value of UNC’s $2.2 billion endowment to $1.78 billion between July 2008 and July 2009.

“That’s a painful, significant loss and something we’re going to be dealing with for a while,” King said during a Board of Trustees meeting Friday.

By comparison, N.C. Central University saw a 10.54 percent loss — $1.79 million — that reduced the value of its endowment from $17 million to $15.2 million.

Universities use interest earned from endowments to pay for scholarships and professorships, among other things.

The 19.6 percent loss in UNC’s endowment places it “squarely in the middle of the pack” of what other universities experienced during the past fiscal year, King said.

He said that the endowment continues to rank in the top 10 percent of funds for the three-, five- and 10-year periods ending June 30.

One culprit in the UNC Investment Fund’s decline, which is composed almost entirely of UNC Chapel Hill’s endowment, was the investment fund’s real estate portfolio, which recorded a 38.8 percent loss for the fiscal year. The real estate portfolio made up about 9 percent of the fund’s investments.

Meanwhile, the fund’s domestic equity, international equity and private equity categories also suffered major losses of between 20 percent and 26 percent, which represented a major blow. Collectively, they made up 45 percent of the fund’s investments.

And even the fund’s “absolute return” category, which is expected to retain value in down markets, experienced a 16.9 percent loss.

Over the past 20 years the university has thrived, routinely enjoying returns in the 15 percent to 20 percent range, King said. Those days are gone and are unlikely to be seen again within the next two decades, he said.

“We’ve been spoiled over the last 20 years,” King said. “We’ve lived in a bull market environment.”