University of California’s $8.9 billion general endowment returned a net 7.2% for the fiscal year ended June 30, surpassing the custom benchmark return of 3.7%, show figures released by the office of the chief investment officer of the regents.
“I am encouraged by the accomplishments of our new team and by the relative performance of our investments in the low-return environment of this past year,” said Regent Paul Wachter, chairman of the committee of investments, in a statement.
Jagdeep Singh Bachher became the Oakland-based university’s chief investment officer in April 2014, bringing in a largely new team of portfolio managers and top executives to manage the endowment, university retirement plans and other assets. But sources said key changes in asset allocation, including increasing alternatives allocations, that helped lead to the latest yearly results were put in to place by departed team members.
The endowment’s largest asset class, absolute return at $2.1 billion, returned 6.7% for the year compared to the benchmark’s 2.3%. That was followed by the $1.1 billion domestic equity portfolio, which returned of 8.3% compared to the Russell 3000 benchmark’s 7.3%, excluding tobacco stocks.
On a three-year basis ended June 30, the overall endowment returned an annualized 12.4% compared to the benchmark’s 9.9% and for five years returned an annualized 11.3% compared to the benchmark’s 8.9%.
University spokeswoman Dianne Klein said officials in the CIO’s office were not available to comment.
Investment results for the university’s $55 billion pension fund were less robust. It returned 4.5% for the fiscal year compared to the university’s benchmark of 2.2%.
Results for the university’s $7.4 billion total-return investment pool were also muted at 2.6% compared to the benchmark’s 1.2%.