Stock market turmoil in the fourth quarter hit the University of California's retirement and endowment assets, which fell $9 billion in the period, according to the state system's investment office.
Total assets were $114 billion at year end, the office reported at a Jan. 15 board meeting. Losses were concentrated in the public equity portfolio, which was $53.1 billion, or 47% of assets, down from 52% on Sept. 30.
The S&P 500 index dropped about 14% last quarter on concerns over rising rates and geopolitical uncertainty in the U.S. and Europe.
The endowment lost 3.7% in preliminary investment performance for the six months through Dec. 31, according to the office. The pension fund declined 4.9% in the period. The state system is on a fiscal year that ends June 30.
Jagdeep Bachher, the university's chief investment officer, said the returns were mainly the result of poor stock performance.
"Our goal is to remain conservative through these times," Mr. Bachher said in a video broadcast of the meeting. "Just stay cautionary."
After public equities, fixed income in the state system's portfolio made up about a third of the assets on Dec. 31, with the rest allocated to alternatives such as hedge funds, private equity, real estate and other real assets and cash.
There was a strong pipeline of private investments in the last six months of 2018, Edmond Fong, senior managing director overseeing absolute return, said at the meeting. In the fourth quarter, 40% of new investments in the endowment were in private equity and another 40% in hedge funds, he said.