(Bloomberg) — Yale University’s endowment had a 5.7% return on investment in the year through June, the lowest among Ivy League schools other than Princeton University.
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The value of Yale’s endowment has increased to $41.4 billion, the school announced in a statement Friday. Last year, the endowment donated $2 billion to the University of New Haven in Connecticut.
Yale’s endowment ushered in a shift away from U.S. stocks and increased bets on alternative assets such as private equity and hedge funds. As a result, many of the wealthiest universities have largely missed out on the recent stock rally, with the S&P 500 index soaring 23% in the 12 months ended June 30.
Matt Mendelsohn, chief investment officer at Yale University, said in a statement: “Our significant allocation to private assets means that during periods of strong public market performance, the exit market for private assets in particular is weak.” “Delays are expected during this period.” “While we remain focused on achieving long-term investment success, we recognize that doing so may result in significantly lower performance in the short term.”
Yale did not provide a breakdown of its asset allocation in a statement.
The median annual return for university endowments was 10.6% before fees, according to the Wilshire Trust Universe Comparison Service, which does not name individual schools. Wilshire said smaller funds performed better, with a median return of about 11% for funds under $500 million, compared to 9.1% for funds over $500 million. It is said that
In the eight-member Ivy League, Princeton University posted the lowest return with a return of 3.9%, while Columbia’s fund led the group with an investment return of 11.5%. Harvard University’s endowment, the largest in U.S. higher education, returned 9.6%.
Among U.S. universities, one of the biggest beneficiaries was Michigan State University. The fund returned 15% in that period, relying on high returns from public equity.
Yale University’s fund has been run by Mendelsohn since 2021. He succeeds the legendary David Swensen, who served as chief investment officer for 36 years until his death three years ago.
The endowment’s 10-year annualized return ranks second in the Ivy League. Brown University took first place.
(Updated reference to asset allocation in paragraph 5.)
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