The return on Yale’s endowment in fiscal year 2024 was 5.6%, the second-lowest return among Ivy League schools, the university announced late last week. Assets under management of the Investment Office increased to $41.4 billion and investment returns were $2.3 billion.
The foundation distributed $2 billion during the fiscal year to support university operations and received $231 million in endowments. Through gifts, investment income, and distributions, the endowment’s assets increased by $700 million.
Matt Mendelsohn, chief information officer at Yale University, said the return was due to lagging returns on private market assets. The late Yale University and former chief information officer (CIO) David Swensen is known for pioneering the Yale Model, a portfolio strategy focused on alternative investments, particularly illiquid private market investments. .
“Given our significant allocation to private assets, we expect there to be a lag in periods of strong public market performance, particularly during periods of weak private asset exit markets,” Mendelsohn said in a statement. ” “As always, we remain focused on achieving long-term investment success, but we recognize that doing so may result in significantly lower short-term performance.”
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Yale’s endowment revenue lagged behind every other Ivy League school except Princeton, which had a 3.9% return over the same period. The Yale University Endowment returned 1.8% in 2023 and 0.8% in 2022, marking two years of lower private market returns.
Despite recent weakness in private market returns, Yale’s endowment has returned 9.5% and 10.3% annually over the past 10 and 20 years, respectively. The fund noted in its announcement that these returns outperformed the 70/30 portfolio by 3.8% over both the 10-year and 20-year periods.
Related articles:
Princeton University’s 3.9% return falls short of its Ivy League peers.
Harvard University’s assets reach $53 billion with 9.6% return, endowment remains world’s largest
Cornell Endowment’s return in 2024 is 8.7%
Tags: endowment, ivy league, matt mendelsohn, yale university
