Princeton University announced that the net return for its endowment was -1.7% for the fiscal year ended June 30, just below the -1.5% return reported for the prior fiscal year.
Endowment assets, managed by the Princeton University Investment Co., fell 5% to $34.1 billion from $35.8 billion a year earlier.
For the 10 years and 20 years ended June 30, the endowment returned 10.8% and 10.5%, respectively, the university announced in an Oct. 25 news release.
Among the 29 college and university endowments whose returns have been tracked by Pensions & Investments as of Oct. 25, Princeton is the third following Duke University and Massachusetts Institute of Technology to report a negative return, and the first to post a return lower than the prior fiscal year.
Other endowments have seen considerable improvements in their returns this year, primarily due to a market rally by the public markets during the year ended June 30. For the year ended June 30, the Russell 3000 and Bloomberg U.S. Aggregate Bond index returned 19% and -0.2%, respectively, well above the respective returns of -13.9% and -10.3% for the year ended June 30, 2022. Private market asset classes have not fared as well as public equities over the past year.
The news release did not provide a reason for the underperformance or any returns by asset class.
According to the Princeton University Investment Co. website, the endowment's target allocation is 30% private equity, 24% independent return, 18% real assets, 12% developed markets equities, and 8% each emerging markets equity and fixed income/cash.
The independent return asset class consists of "investment vehicles that seek high absolute returns that are independent of broad market trends," according to the website.
