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UCLA endowment assets up 12.3% annually over 3 years

The University of California, Los Angeles endowment has grown the fastest among U.S. colleges since 2008 as markets recovered and gifts from philanthropists such as casino mogul Kirk Kerkorian surged.

UCLA’s endowment size increased an average 12.3% annually to $1.49 billion in the three years through 2011, almost double the 6.5% growth of Washington and Lee University, Lexington, Va., the next best performer, according to data compiled by Bloomberg.

By contrast, the endowment at Harvard University, Cambridge, Mass., shrank 3.7% to $31.7 billion.

Private donations to UCLA have rebounded since the financial crisis amid deep cuts by the state to public university funding. Gifts and pledges surged last year as Mr. Kerkorian transferred a $200 million foundation he controlled to UCLA, while Meyer and Renee Luskin donated $100 million.

At the same time, the school has earned 17% and 12% in investment returns in the past two years to recoup a 21% loss in 2009, according to the university.

Most college endowments are still struggling to recover from losses triggered by the collapse of Lehman Brothers Holdings in 2008, according to an annual report released in January by Commonfund and the National Association of College and University Business Officers. About 47% of the funds haven’t yet recouped losses from that year, as investments in hedge funds lag traditional strategies such as stocks, the report said.

Hedge funds returned 9.4% in the year ended June 30, the worst-performing portion among endowments’ alternatives strategies, as U.S. stocks surged 30% in that period, according to the report.

Yale University, New Haven, Conn., which under Chief Investment Officer David Swensen pioneered new investment strategies for endowments, was one of the worst performers, with its assets dropping an average 4.7% a year in the period to $19.4 billion.

The Bloomberg study looked at 71 college funds with more than $1 billion in assets.