Treasurer Kennedy Reports LEQTFs Performance to Board of Regents and BESE

BATON ROUGE, LA Louisiana students ranging from preschoolers to collegians benefited this year from more than $66 million in investment earnings from the state’s Louisiana Education Quality Trust Fund (LEQTF). State Treasurer John Kennedy outlined the trust funds performance today at the joint meeting of the Board of Regents and the Board of Elementary and Secondary Education(BESE).

We did exceptionally well on the bond market, and overall, the total return for the portfolio was 4.1 percent, which is pretty good considering everything that happened this year in the market, said Treasurer Kennedy. We were predominately invested in bonds, which helped us out tremendously. With our equity investments, we stuck to our game plan, didn’t panic and made a strong comeback.

The Treasury invested $421 million of the LEQTF in the bond market this past year, returning 11.7 percent on its internally managed bond portfolio. This outperformed the return of the benchmark Lehman Brothers Government/Corporate Bond Index, which was 11.1 percent. The remainder of the fund was invested in mortgage-backed securities, short-term funds, equities and U.S. Treasury notes.

The fund really is one of the quiet success stories of education and Louisiana state government, said Treasurer Kennedy. We still have goals we want to reach, including growing the fund to $2 billion. Once we reach this amount, the state will have $25 million or more each year in recurring revenue from oil and gas royalties, and the LEQTF will be able to make more money each year for our schools.

The LEQTF began in 1986 when the state won a $641 million dollar settlement with the federal government over oil and gas revenues. The state placed $541 million into a trust fund similar to what it did with its sale of the tobacco settlement and the LEQTF now totals $909 million. Each year, the Treasury equally distributes 75 percent of the interest earned on the trust fund to BESE and the Board of Regents. Since the fund began, the Treasury has distributed $791 million to the two groups.

Projects benefiting from the LEQTF range from reading, writing and art classes for elementary students to chemistry, mathematics and health research projects at statewide universities. For a list of schools and projects in your area that benefited from the trust fund, download the 2001 LEQTF Annual Report at www.latreasury.com.

Contact:
Sarah Mulhearn
(225) 342-0012