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Endowments and Foundations

Yale endowment posts 11.3% return

Yale University's endowment returned 11.3% for the fiscal year ended June 30, bringing the value to $27.2 billion. The endowment's value rose 7.1% from the year before.

For the 20 years ended June 30, Yale's endowment returned an annualized 12.1%, above broad market results for domestic stocks, which returned 7.5% annually, and domestic bonds, which returned 5.2% annually, said a news release from the New Haven, Conn., university. Yale did not provide any other long-term returns.

By asset class, Yale's 20-year annualized returns were venture capital, 106.3%; natural resources, 15.2%; foreign equities, 14.1%; leveraged buyouts, 12.6%; domestic equities, 12.2%; real estate, 10.3%; and absolute return, 8.9%.

The news release attributed its venture capital return over the past 20 years as being "heavily influenced by large distributions during the Internet boom."

One- and 10-year returns for the individual asset classes were not provided. Last fiscal year, Yale's endowment returned 3.4%.

The endowment's target asset allocation for the fiscal year started July 1 is 25% absolute return, 17% venture capital, 15.5% international equity, 14% leveraged buyouts, 10% real estate, 7.5% bonds and cash, 7% natural resources and 4% domestic equity.

Yale targets a minimum allocation of 30% of the endowment to market-insensitive assets (cash, bonds and absolute return). The university further seeks to limit illiquid assets (venture capital, leveraged buyouts, real estate and natural resources) to 50% of the portfolio.