Stanford University’s $40.9 billion investment fund returned 4.4% during the 12 months ending June 30, topping results at other elite colleges despite headwinds from venture capital and private equity.
The performance of the fund, which includes Stanford’s endowment of more than $36 billion, outpaced returns of less than 2% at Yale University and the University of Pennsylvania during the period. The Massachusetts Institute of Technology posted a loss due in part to declining values in venture-capital investments, a trend that also weighed on Stanford.
“Strong results in most asset classes during the past year were partially offset by losses in our venture capital and growth equity portfolios, continuing a correction that began in 2022,” Robert Wallace, chief executive officer of Stanford Management Company, said in a statement.
Stanford’s returns, like those of similar schools, have significantly trailed the gains in the S&P 500, which rose 18% in the year through June. That’s part of a broader trend of lagging results at big endowments despite their sophisticated alternative-investment strategies. Returns at smaller funds, which tend to bet more heavily on US stocks, have outperformed those of larger endowments, according to Wilshire Trust Universe Comparison Service.
Stanford’s endowment comprises three-fourths of its investment fund, which also includes reserves of Stanford Health Care and Stanford Medicine Children’s Health. The value of the endowment was $36.5 billion as of Aug. 31, the end of its fiscal year. Stanford reported its investment results for the year ending in June, which aligns with the fiscal year at most schools.
The median return for endowments larger than $500 million was 6.2% before fees during that 12-month period, according to Wilshire Trust, which doesn’t name individual schools. For funds smaller than $500 million, the median return was 10%.
This article was provided by Bloomberg News.