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

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When asked about returns, loca l hospitals’ chief financial officers said theyare “down,” a description quicklyg followed by “obviously.” Don Pounds, CFO for , says his system’z two major portfolios lost $34 milliomn collectively in calendar year 2008 compared to 2007. Taken that represented a 5% But, he says, the fund based on hospita l earnings saw aroughly 10% decrease. Baptisr has a “very vanilla investing Pound says, consisting of blue-chip stocks, bonds and cash equivalente — no hedge funds, real estatse or similar investment vehicles.
“When the market’s goinhg great, we’re not at the high end of it with our Pounds says. “But when it goes south, we’rse not at the lowesf end of that, either.” , CFO Chris McLean says the system’x portfolio saw a 16% decrease in calendar year 2008 comparedto 2007. The lossez began in September 2008 and continued throughout Januaryh and February 2009 with an uptickin March. Short-term investmentw for construction projects at and heldthe system’s losses at 16%, McLean says, compared to the overall 30% fall of the stockk market. But changes are coming to the system’xs investment strategy.
“We’re looking at moving our risk profilre down a little bit to reduce our equith exposure and increase ourfixeed income,” McLean says. “Wwe have a strong balance sheet sothis doesn’t impacf any of our major plans.” Those planse include the new $325 million Le Bonheur project, the $121 millionb Germantown project and a possibler $151 million hospital in Olive Branch. “So, taking some risk off of our investmentg side seems prudent given thatwe don’t need some unexpected activities to affect our McLean says.
Funds for the system’as hospice facility were raised throughu its foundation and the project willmove forward, he SEC filings for , parent company of and Saint Francis-Bartlett, revealk investment earnings for its 52 hospitals were $1 milliobn for the final three monthes of 2008, compared to $11 millionj for the same quarter in 2007. That shar p decline helped trim year-end earnings from $47 million in 2007 to $22 millio in 2008. A year-end report says the system sold $139 milliomn in investments last year, but sold none in 2007. The sale of marketablee securities, long-term investments and other assetsyielded $706 million for Tenett in 2007 and only $224 millionb last year. St.
Jude Children’s Research Hospital brought in $660.q million last year, well abovd the $587.6 million it reported in 2007. However, its net investmeny income fellfrom $254.7 million in 2007 to $32.2 million last according to annual reports furnished by the