Several Universities Report Double-Digit Gains In Their Endowments

Major universities are beginning to report the performance of their endowments for the fiscal year that ended on June 30, 2024, and the early news finds several institutions realizing double-digit investment gains.

Here’s a rundown of some initial results.

Brown University’s endowment saw an 11.3% investment return during Fiscal Year 2024. It racked up $728 million in investment gains and $203 million in new endowed gifts. After a $281 million contribution to Brown’s operating budget, the endowment’s total market value increased from $6.6 billion to $7.2 billion.

The value of Columbia University’s endowment stood at $14.8 billion at the end of Fiscal Year 2024, reflecting a return of 11.5% on its assets. “Fiscal 2024 was a strong year for public market performance. We benefitted both from our exposure to public markets and from strong performance of individual managers relative to benchmarks,” said Columbia Investment Management Company President and CEO Kim Lew, in a news release.

The University of Texas/Texas A&M Investment Management Company, which oversees investments for the University of Texas and Texas A&M University Systems, reported preliminary gains of 10.5% in its $36.5 billion Permanent University Fund and 10.4% for its $23.5 billion Long-term Fund for the period ending August 31, 2024.

The Ohio State University’s endowment reached $7.9 billion as of June, 30, which included a 10.8% gain in its value for the fiscal year. While that was a bit short of its 15% benchmark, it enabled a record $305 million distribution of support to the institution’s budget.

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The University of Minnesota Foundation reported a 13.4% gain in its $3.7 endowment, significantly exceeding its return goal of 8.1%.

At North Carolina State University, the endowment’s long term investment pool grew by 11.8% to a market value of $1.8 billion, a bit shy of its 14.2% benchmark.

The University of Connecticut Foundation’s endowment achieved a 12.1% return in the last fiscal year, increasing the institution’s endowment by $57 million to a total of $634 million. David Carney, the foundation’s senior vice president for finance and administration and CFO, attributed much of this year’s strong performance to robust technology stock returns and various diversification strategies.

Returns were weaker than projected for the University of Virginia’s endowment. Its $14.2 billion portfolio saw a gain of 7.5%, falling far short of its 15.3% policy benchmark for a one-year annualized return. The University of Virginia Management Company suggested that the underperformance was due to a large allocation to private markets, which have been outperformed by public equities recently.

Dartmouth College realized an investment return of 8.4% for its endowment. At the end of Fiscal Year 2024, its endowment’s value was $8.3 billion, and it distributed nearly $430 million throughout the year to fund 28% of the institution’s annual operating budget.

The current market value of an endowment reflects the net impact of: 1) annual withdrawals to fund institutional operations like scholarships, endowed faculty positions, program enhancements and capital expenses; 2) payment of management and investment fees; 3) additions from donor gifts and other contributions; and 4) investment gains or losses.

If results like these are achieved at other institutions, university endowments overall could see improved performance over Fiscal Year 2023’s average endowment return of 7.7%, net of fees. It would mark a second straight year of strong investment turnarounds from Fiscal Year 2022 when the average return was a dismal -8.0%.

The annual study of college and university endowment, prepared by the National Association of College and University Business Officers and Commonfund Institute, will be released in February.