NACUBO-Commonfund: Endowments grow 11.7% to $448.6 billion

U.S. college and university endowment assets totaled $448.6 billion in the fiscal year ended June 30, up 11.7% from a year earlier, according to the NACUBO- Commonfund Study of Endowments.

The 25 largest endowments held an aggregate $232.5 billion, up 8.6% in the year ended June 30. The largest endowment funds accounted for 52% of the total assets of the full universe of 835 American colleges and universities that responded to the jointly sponsored survey.

Partial data from the study were released Tuesday.

Harvard University was once again the largest U.S. endowment fund with $32.3 billion in the fiscal year ended June 30, up 6.2% from the end of the previous fiscal year, followed by Yale University, up 7.4% to $20.8 billion; University of Texas System, up 12% to $20.4 billion; Stanford University, up 9.7% to $18.7 billion; and Princeton University, up 7.4% to $18.2 billion.

After a “very good investment year,” endowments in the survey reported an average net return of 11.7% in the fiscal year ended June 30, said Verne O. Sedlacek, Commonfund's president and CEO, during a teleconference press briefing. Mr. Sedlacek noted that the strong 2013 fiscal return was “a positive trend,” after the -0.3% average net return reported by endowment respondents for the year ended June 30, 2012.

While the largest endowments managing more than $1 billion had an average allocation of 59% to alternatives and 30% to domestic and international equity, the smallest funds managing less than $25 million had just 11% on average invested in alternatives and 57% in all equities.

Thanks to strong equity market performance in the year ended June 30, with the S&P 500 returning 17.9% for the period, performance of tiny endowments matched that of mega funds, Mr. Sedlacek said.

Both the largest endowments (more than $1 billion) and the smallest (less than $25 million) produced the same average net return of 11.7%. Average net returns of funds for the year ended June 30 in other size categories were 12% for $501 million to $1 billion; 11.9%, $101 million to $500 million; 11.5%, $51 million to $100 million; and 11.4%, $25 million to $50 million.