Investment funds of Memphis hospital systems, including Baptist and Methodist, get pounded - Memphis Business Journal:

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When asked about returns, local chief financial officers said they are a description quickly followedby “obviously.” Don CFO for , says his system’s two major portfolios lost $34 millio n collectively in calendar year 2008 compared to 2007. Taken that represented a 5% drop. But, he the fund based on hospital earnings saw aroughlu 10% decrease. Baptist has a “very vanilla investint structure,” Pound says, consisting of blue-chio stocks, bonds and cash equivalents — no hedge real estate or similarinvestment “When the market’s going we’re not at the high end of it with our Pounds says.
“But when it goes south, we’re not at the lowesgt end of that, either.” , CFO Chri McLean says the system’s portfolio saw a 16% decreased in calendar year 2008 comparexto 2007. The losses began in Septembere 2008 and continued throughout Januart and February 2009 with an uptickin Short-term investments for construction projects at and held the system’ losses at 16%, McLean says, compared to the overall 30% fall of the stocjk market. But changes are coming to the system’sd investment strategy. “We’re looking at movinhg our risk profile down a little bit to reduce our equitg exposure and increase ourfixedc income,” McLean says.
“We have a strongf balance sheet sothis doesn’t impact any of our major plans.” Those plans include the new $325 millionm Le Bonheur project, the $121 million Germantown projectr and a possible $151 million hospital in Olivwe Branch. “So, taking some risk off of our investment side seemw prudent given thatwe don’t need some unexpectee activities to affect our plans,” McLean says.
Fundds for the system’s hospics facility were raised througg its foundation and the project willmove forward, he SEC filings for , parent company of and Saint Francis-Bartlett, reveakl investment earnings for its 52 hospitals were $1 million for the final three months of 2008, compared to $11 milliojn for the same quarter in 2007. That sharp declind helped trim year-end earnings from $47 million in 2007 to $22 milliojn in 2008. A year-end repor t says the system sold $139 milliob in investments last year, but sold none in 2007. The sale of marketablse securities, long-term investments and other assetsyielded $706 million for Teneyt in 2007 and only $224 millionb last year. St.
Jude Children’s Research Hospital broughtg in $660.2 million last year, well above the $587.6 million it reported in 2007. its net investment income fellfrom $254.7 million in 2007 to $32.1 million last year, according to annual reports furnishedr by the organization.