Vanderbilt endowment sees second straight year of negative returns

Vanderbilt University's $9.7 billion endowment returned a net -2% for the fiscal year ended June 30, according to a financial report on the Nashville, Tenn.-based university's website.

For the three years ended June 30, the endowment returned an annualized net 13.7%, according to the report. The endowment had returned a net -4.4% for the fiscal year ended June 30, 2022.

The second straight year of negative returns came despite a dramatic recovery in public equities during the period; the Russell 3000 index and MSCI EAFE index return 19% and 18.8%, respectively, well ahead of their respective returns of -13.7% and -17,8% for the fiscal year ended June 30, 2022.

Vanderbilt's endowment return also fell below the median return of 4.4% among the 33 college and university endowments whose most recent fiscal-year returns have been tracked by Pensions & Investments as of Oct. 31.

Endowments with large allocations to private markets have experienced lower returns this past year as valuations take the prior year's public markets losses into account.

As of June 30, Vanderbilt's endowment had an actual allocation of 36% private capital, 22% hedged strategies, 20% global equities, 8% fixed income, 6% natural resources, 3% each cash/cash equivalents and real estate and 2% commodities.

The financial report did not provide returns by asset class.