Investment professionals are closely tracking investment performance and movements in Asset Allocation of major US universities’ endowment funds, especially so-called Super Endowments of Yale and Harvard. These funds have consistently achieved superior investment returns while managing the drawdown risk.
University Endowment Funds have a long investment horizon, and diverse portfolio with exposure to multiple assets, including a significant portion committed to Alternative Investments. Endowments spend c. 5% p.a. of their assets to support their universities and still manage to accumulate massive assets pools from donors’ gifts and investing results.
Interesting off-topic fact: A research paper mentions that donors increase their contributions when endowment returns are strong, i.e. the economy and financial markets are strong, with an elasticity of about 0.20 between net-of-market investment returns and new donations.
Major University Endowments: Harvard ($50.9B), UT System ($42.9B), Yale ($41.4B), Stanford ($36.3B), Princeton ($35.8B), MIT ($27.4B), UPenn ($20.5B), Texas A&M ($18.2B), Notre Dame ($18.1B), Michigan ($17.0B), Columbia ($13.3B), Duke ($12.7B), Northwestern ($14.0B).
Source: Bloomberg, Endowment Fund reports
Leave a Reply