Endowment posts 8.9 percent return for last year

Yale’s endowment returned 8.9 percent in the 2010 fiscal year, the University announced this morning.

After endowment spending, the fund grew 2.5 percent, rising from $16.3 billion in 2009 to $16.7 billion this summer.

The gain is in line with what administrators said they had expected. It falls short of the 13.3-percent average return of other endowments tracked by Wilshire Associates, a California-based investment consulting firm, but it recovers some of the $7 billion the endowment lost last year.

Those figures include an investment return of $1.4 billion, expenses of $1.1 billion and gifts of $136 million.

The results are lower than at Harvard’s endowment, which increased 11 percent this year, and at Columbia’s, which jumped 17 percent.

Although Yale trails both schools this year, it has outperformed both in the long term, according to the release: It produced an average annual return of 8.9 percent over the last decade, beating Harvard’s 7 percent.

Comments

  • aluminterviewer

    So, after netting out expenses (including withdrawals) Yale’s endowment rose by $400 million, and Harvard’s rose by $1.4 billion?

  • BKalum

    Aluminterviewer,

    I don’t think that “expenses” is the right term, but basically Yale’s endowment increased from $16.3 bb to $16.7 bb, while Harvard’s went from $26 bb to $27.4 bb.

  • aluminterviewer

    That is how the endowments refer to the outgo … “expenses”. This is the sum paid to endowment managers, transferred to the operating budget, or assigned for some capital expenditure.

    Unclear is how the schools handle the interest payments and principal due on the mega-loans they took out to avoid selling endowment assets that dropped greatly in price. If Harvard, Yale, Princeton and Stanford all borrowed $1 billion+ in order to avoid such inconvenient asset sales, is the principal of such a loan subtracted from the “net endowment” figure reported?