Oct 10 - Results posted by some college and university endowments in the U.S. suggest investment performance may lag endowment goals for fiscal 2012. Some of the country's premier institutions have recently reported lower than anticipated returns primarily due to a weakness in equity markets during the first quarter of the calendar year. Fitch believes weaker return levels could pressure some private institutions with limited financial resources or those heavily reliant on endowment distributions to fund operations. Policy-driven endowment payouts are typically in the 5% range based on a three-year rolling average. For institutions with payouts greater than this average level, financial flexibility may be especially pressured due to the lagging returns. Those institutions that planned to balance their budgets with investment earnings may also be affected. Fitch does not expect many rated colleges or universities to alter their capital expenditures for large projects based on these weaker investment returns, as these projects are largely funded through a combination of philanthropy, debt, and operating cash flows. However, some institutions may extend the project timeframe if operating cash flows are negatively affected by investment losses. While investment results were weaker than in fiscal years 2010 and 2011, the magnitude of the recent investment performance is still dwarfed by the losses experienced in 2008 and 2009. Generally speaking, public colleges and universities typically are less dependent on investment earnings than their private counterparts as a result of greater revenue diversity and, in many cases, more conservative asset allocations. Therefore, Fitch does not expect to see significant financial impact due to lower investment returns for public institutions.