Investment return of 20.2% brings Yale endowment value to $23.9 billion

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(Photo by Michael Marsland)

Yale’s endowment earned a 20.2% investment return for the year ending June 30, 2014. The endowment value grew from $20.8 billion on June 30, 2013, to $23.9 billion on June 30, 2014, net of spending. The University benefited from investment gains of approximately $4.0 billion.

Spending from the endowment for Yale’s 2015 fiscal year is projected to be $1.1 billion, representing approximately 34% of the University’s net revenues. Endowment distributions to the operating budget have nearly doubled in the last decade.

The University’s longer term results remain in the top tier of institutional investors. Yale’s endowment returned 11.0% per annum over the 10 years ending June 30, 2014, surpassing broad market results for domestic stocks, which returned 8.4% annually, and for domestic bonds, which returned 4.9% annually. Relative to the estimated 7.6% average return of college and university endowments, over the past decade Yale’s investment performance added $8.4 billion of value in the form of increased spending and enhanced endowment value. During the 10-year period, the endowment grew from $12.7 billion to $23.9 billion, net of spending.

Over the past two decades, Yale’s endowment generated returns of 13.9% per annum. Compared to the estimated 9.2% average return of college and university endowments, Yale’s investment performance added $20.6 billion of incremental value. During the 20-year period, the endowment grew from $3.5 billion to $23.9 billion, net of spending.

Long-Term Asset Class Performance

Yale’s 10-year asset class performance remains strong. Domestic equities returned 12.0%, besting the benchmark by 3.5% annually. Foreign equities produced returns of 18.0%, surpassing the composite benchmark by 8.4% annually.  Absolute return produced an annualized return of 9.0%, while private equity returned 15.4%. Real estate and natural resources contributed annual returns of 6.6% and 16.5%, respectively.

Asset Allocation

Yale continues to maintain a well-diversified, equity-oriented portfolio, with the following asset allocation targets for fiscal 2015:

Private Equity:           31%

Absolute Return:        20%

Real Estate:               17%

Foreign Equity:          13%

Natural Resources:     8%

Domestic Equity:        6%

Bonds and Cash:        5%

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