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The
annual Nacubo-Commonfund Study of Endowments, based on data from
812 schools, found that schools put more than half of their
investments into so-called alternative strategies, including
venture capital, private equity and hedge funds.
In fiscal 2015, alternative strategies earned only a 1.1 percent
return, far less than the 12.7 percent they earned the year
before. Within the group, venture capital investments were the
most lucrative, yielding a 15.1 percent return, while so-called
marketable alternative strategies, including hedge funds, inched
up only 2.7 percent.
Domestic equities were last year's best performing asset class
with a 6.4 percent gain, but they made up only 16 percent of
schools' endowments, the study found.
Last year's returns pulled down the 10-year average annual
returns to 6.3 percent from 7.1 percent, the group found.
Harvard University [PDFHV.UL] still boasts the largest endowment
with $36.4 billion, followed by Yale [YALE.UL], whose $25.6
billion endowment moved up in the rankings to edge the
University of Texas System endowment, which has $24 billion, in
the third largest spot.
Yale's 11.5 percent investment returns last year beat Harvard's
5.8 percent gain, helping the New Haven, Connecticut-based
school best the returns of its Cambridge, Massachusetts-based
Ivy League rival for the fifth straight year and grow its
endowments enough to climb in the rankings. Yale's investment
chief, David Swensen, relies heavily on hedge funds and private
equity investments to fuel returns.
(Reporting by Svea Herbst-Bayliss; Editing by Peter Cooney)
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