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Stanford, Yale Endowments Outperform Harvard

9.28.12

Stanford and Yale, whose diversified endowment investment portfolios are similar to that of Harvard Management Company's (HMC), reported fiscal year 2012 investment returns somewhat above the nearly-flat University results reported earlier this week. 

As noted, HMC earned a -0.05 return on investments in the year ended June 30, and the endowment declined in value from $32 billion to $30.7 billion, reflecting spending to support University operations and other distributions.

Stanford Management Company reported a positive 1.0 percent investment return. The endowment increased in value by 3.2 percent, to $17 billion, reflecting investment gains and gifts received (the latter, a large sum, reflecting a recent capital campaign that raised $6.2 billion), and endowment distributions of $872 million (about half of Harvard's estimated endowment distribution during the year). That distribution is budgeted to increase 5.4 percent during the current year.

Yale, which in many respects pioneered the current model of highly diversified endowment investing—with heavy reliance on illiquid investment such as private equity, hedge funds, real estate, and other real assets—reported a 4.7 percent investment return for fiscal 2012. But Yale's endowment, like Harvard's, declined—albeit more modestly, from $19.4 billion to $19.3 billion in New Haven during the course of the year. That result reflects spending distributions from the endowment of approximately $1 billion,  Yale reported—about 36 percent of that institution's revenues.

Yale's annualized rate of investment return for the past 10 years now stands at 10.6 percent; for the past 20 years, it is 13.7 percent. Stanford's comparable 10-year rate of return is 9.7 percent. HMC's returns are 9.5 percent (10 years) and 12.3 percent (20 years).

 

 

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