Eli Lilly and Co. and Lilly Endowment and Investing and Foundations and Philanthropy

Lilly Endowment sells Lilly stock for first time since '08

April 29, 2014

Lilly Endowment sold 150,000 shares of Eli Lilly and Co. stock Monday, resuming an asset-diversification plan suspended when stock prices swooned in 2008.

The Indianapolis-based foundation said it will use stock-sale proceeds—about $8.8 million based on Monday’s $58.97 closing price, with future sales likely—to fund grants and operations while broadening its investment portfolio.

Established in 1937 with the gift of Lilly stock by members of the founder’s family, Lilly Endowment still owns more than 135 million shares, or a 12-percent stake, enough to make it the pharmaceutical firm’s largest investor.

Lilly shares represented almost all of the endowment’s assets for decades, but its board in 2006 announced plans to sell $2 billion of stock to diversify its holdings. By then, most other large foundations had already taken that step to limit financial volatility.

The endowment sold $390 million worth of Lilly shares through September 2008, reinvesting the money in indexed mutual funds. Then, share prices slumped and the selloff stopped.

Lilly Endowment lost 26 percent of its value in 2008, falling from $7.7 billion to $5.7 billion. It bottomed out at $5.3 billion (2009 and 2010) before posting gains along with the company. At the end of 2012, endowment assets totaled $7.4 billion.

Now the foundation is looking to cash in on the recovery, as officials contemplate selling as much as $500 million in stock in 2014, “with the amount subject to change as the year progresses,” according to a statement released Monday.

Click here for more IBJ coverage of Lilly Endowment and its grant-making activities.
 

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