University of Rochester's $3.5 billion long-term investment pool of investment assets returned a net 9.5% for the fiscal year ended June 30.
The return was well short of the benchmark return of 16.5% for the period, according to a fiscal year report on the Rochester, N.Y.-based university’s website.
The report did not provide annualized returns for longer periods, but said while the investment pool’s 10-year annualized return exceeded the benchmark, the three- and five-year returns lagged behind them.
The lag behind the benchmark was attributed to “the rapid increase in the equity benchmark from the price frenzy in the ‘Magnificent 7’ stocks (artificial intelligence) and a slightly negative three-year return on private partnerships. Private partnerships remained the LTIP’s best-performing asset class for five and ten years.”
The investment pool had returned a net 6.9% for the fiscal year ended June 30, 2023.
For the most recent fiscal year, the investment pool’s return was just short of the median return of 9.8% among the 40 college and university endowments whose returns for the period have been tracked by Pensions & Investments as of Nov. 4.
According to the fiscal year report, the top-performing asset class was emerging markets equities, which returned a net 20.1% for the fiscal year ended June 30, followed by opportunistic investments at a net 15%; long-short equities, 13.1%; uncorrelated hedge funds, 11.9%; ACWI ex-U.S. mandate, 8.6%; fixed income, 7.3%; venture capital, 6.1%; short-term investments, 5.6%; private equity, 2.9%; and real assets, -5.3%.
As of June 30, the actual allocation was 15.3% venture capital, 14.9% uncorrelated hedge funds, 13.4% opportunistic investments, 13.1% private equity, 11% emerging markets equities, 10.5% long/short equities, 9.4% ACWI ex-U.S. mandate, 4.4% fixed income, 4.1% short-term investments and 3.9% real assets.