Yale endowment surges to $42.3B
PHOTO | MICHAEL MARSLAND/YALE UNIVERSITY
Sterling Memorial Library at Yale University.
With a 40.3% net return on its investments, Yale University reported $12.1 billion in gains on its endowment for the fiscal year ending June 30, bringing it to an eye-popping total of $42.3 billion.
That makes the New Haven-based school second nationally only to Harvard in the size of its endowment, although Yale’s Boston rival reported only a 34% return in the same period, for a $53 billion total.
A boom year for private equity and venture capital has turbo-charged growth in many university endowments, according to Inside Higher Ed.
Bowdoin College and Brown University both reported investment returns in excess of 50%, matching the rise in valuation of early-stage startups in the same period, the publication reported.
Yale Chief Investment Officer Matt Mendelsohn said, “It was an extraordinary year for the endowment, which will benefit the Yale community now and for generations to come.”
The university drew $1.5 billion from the endowment for its operations during the last fiscal year, accounting for about 35% of its budget.
Yale’s investment strategy, long hailed as producing exceptionally high returns, relies on a range of assets, including public equities, absolute return, leveraged buyouts, venture capital and real assets. The university’s long-term time horizon allows for strategic investments, according to a Yale statement.
In the 20 years ending this June, Yale’s returns averaged 11.3% a year, outperforming domestic stocks at 9.1%, domestic bonds at 4.6% and the average 20-year return for college and university endowments, at 7.7%. In that time period, Yale’s endowment grew from $10.7 billion to $42.3 billion, after $19.5 billion in allocations to the budget.
In a further effort to grow its assets, Yale launched a major capital campaign earlier this month with a goal of amassing at least $7 billion in contributions from alumni and supporters to broaden the university’s international impact.
Early contributions to the fundraising effort included a $150 million pledge from Hollywood mogul David Geffen, which resulted in the elimination of tuition at the drama school and its renaming to the David Geffen School of Drama at Yale.
Contact Liese Klein at lklein@newhavenbiz.com.
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