Yale endowment returns 22.9 pct; Swells to $18 Billion

Colleges and Universities A-Z Yale University
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<p>Yale released its latest endowment information today. I'm amazed that they managed to get such great returns!</p>

<p>Link: <a href="http://today.reuters.com/news/articleinvesting.aspx?type=fundsNews2&storyID=2006-09-25T193941Z_01_N25284403_RTRIDST_0_FINANCIAL-FUND-YALE.XML%5B/url%5D"&gt;http://today.reuters.com/news/articleinvesting.aspx?type=fundsNews2&storyID=2006-09-25T193941Z_01_N25284403_RTRIDST_0_FINANCIAL-FUND-YALE.XML&lt;/a&gt;&lt;/p>

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BOSTON, Sept 25 (Reuters) - Yale University, the world's second-richest university, said on Monday its endowment fund returned 22.9 percent in 2005-06, beating returns by wealthier rival Harvard University for a second straight year.</p>

<p>The returns swelled Connecticut-based Yale's endowment to $18 billion for the year to June 30 from $15.2 billion in the previous year, and marked a slight improvement on its 22.3 percent return in 2004-05.</p>

<p>Harvard, the world's richest university, said last week its endowment grew to $29.2 billion, generating a 16.7 percent return for 2005-06. Cambridge, Massachusetts-based Harvard had returned 19.2 percent the year before.</p>

<p>Endowments at Ivy League universities such as Harvard and Yale, and their annual returns, are closely watched by fund managers because of their reputation for savvy investing.</p>

<p>Yale, the alma mater of U.S. President George W. Bush, declined to specify how it managed its strong 2005-06 performance, which compares with a return of 6.6 percent for the Standard & Poor's 500 index <.SPX> over the same period.</p>

<p>In an update on the endowment late in 2005, it said the Investment Committee approved an increase in the "real assets" target to 25 percent from 20 percent. Energy, timber and real estate were included in the classification of "real assets."</p>

<p>Yale, which under Chief Investment Officer David Swensen has over the years built a large exposure to alternative investment strategies, also had said it was reducing its fixed income exposure.</p>

<p>Harvard said last week that investments in emerging markets posted the year's highest total return, adding that commodities achieved the best performance relative to its benchmark.</p>

<p>Yale's endowment, which is the university's biggest source of budgetary support, has returned an annualized 17.2 percent over the past 10 years, during which its size has grown to $18 billion from $4.9 billion.</p>

<p>It will spend $676 million, or about 34 percent of the university's net revenues, from the endowment in the year ending June 30, 2007, Yale said.

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<p>Excellent job, Yale!</p>

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<p>swensen is absolutely remarkable</p>

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<p>Yale - which was already richer than Harvard on a per-student basis - has become even richer (at Harvard's expense - my guess is that Yale did a short sell on $5 billion in natural gas a few weeks before Harvard) .</p>

<p>At this rate, won't Yale's endowment reach $1.4 TRILLION and surpass Harvard's in ten years? By that point, do you think Yale will have more than half as many students as Harvard? </p>

<p>The real question, of course, is if the U.S. dollar will be worth anything by then.</p>

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<p>Man, u are such a flame bait.</p>

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<p>Stanford's endowment also grew by 2.8 billion last year. It's 15.2 billion now</p>

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<p>Not a bad return. Stanford had good returns last year, too.</p>

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<p>You're assuming that this is normal growth, not just some spectacular figures fueled by some wall street investors screwing over all the mutual fund little people etc or a lucky profit from energy....</p>

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<p>It's had an over 17 percent annualized growth rate over the past 10 years.</p>

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<p>here's the harvard crimson's somewhat unprofessional and haughty article.</p>

<p><a href="http://www.thecrimson.com/article.aspx?ref=514470%5B/url%5D"&gt;http://www.thecrimson.com/article.aspx?ref=514470&lt;/a&gt;&lt;/p>

<p>They’ve got an inferior football team and a lower U.S. News ranking, but Yalies are beating their Cantab counterparts in at least one category: endowment returns. In the 12-month period ending June 30, the New Haven safety school’s endowment-return rate topped Harvard’s by 6.2 percentage points—the second straight year that the Elis’ investors have bested the Crimson’s team. </p>

<p>Yale’s $18.0 billion endowment still pales in comparison to Harvard’s $29.2 billion treasure chest. And both universities easily outpaced the S&P 500 stock index, which increased by 8.6 percent during the 2006 fiscal year. But Yale’s remarkable 22.9 percent return rate—and Harvard’s comparatively-modest 16.7 percent mark—suggest that Yale’s “external management” approach to its endowment is paying dividends...</p>

<p>Yale’s endowment return rate also eclipsed that of the third-richest university, Stanford. The California party school reported returns of 19.4 percent this past year, raising its overall holdings to $15.2 billion. </p>

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<p>Harvard haughty? I never!</p>