The University’s latest investment returns indicate that the Yale endowment model has regained momentum among its peers.

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Yale’s investment performance exceeded the average endowment return at colleges and universities nationwide in fiscal year 2011 by almost 3 percent, according to the 2011 NACUBO-Commonfund Study of Endowments released today. Though the University’s endowment plunged by 24.6 percent when the recession hit in fiscal year 2009 — far worse than an average 18.7 percent lost by endowments that year ­— Yale’s nontraditional investment strategy has helped the endowment recover and maintain strong long-term growth.

Yale returned 21.9 percent on its investments in the fiscal year that ended June 30, while the national average among 823 colleges and universities included in the study was a 19.2 percent return. Those institutions also maintained an average annual return on investments of 5.6 percent over the past decade, while Yale’s endowment returned an annual average of 10.1 percent during the same period.

Provost Peter Salovey praised Yale’s performance in light of the financial difficulties the University has weathered in past years.

“Although I am pleased Yale beat the average for 2011, it is much more thrilling to me to see that our 10-year return is so strong on both an absolute and comparative basis, especially given the bumpy ride in recent years,” Salovey said in an email.

Topping that national average puts the University back on track after it lagged the 11.9 percent average in fiscal year 2010, when it posted the worst return on investments in the Ivy League at 8.9 percent.

Despite the positive figures reported in the latest fiscal year, higher education endowments have not fully recovered from the effects of the recession, said William Jarvis ’77, managing director of the Wilton, Conn. investment firm the Commonfund Institute. The endowments of almost half of the 823 colleges and universities included in the study are still worth less than they were before the recession first hit. Yale’s endowment also remains below pre-recession levels: it reached a high water mark of roughly $23 billion in fiscal year 2008, but was valued at just $19.4 billion as of June 30.

Jarvis also noted that any financial turbulence since June 30 is not reflected in the fiscal year 2011 figures. He said the average college or university endowment likely declined about 3.5 percent between July and December because of how poorly domestic and international markets performed.

Yale follows a nontraditional investment strategy pioneered by Chief Investment Officer David Swensen and emulated by many of its peers, which favors illiquid, alternative assets such as private equity and real estate. The diversified model helped large endowments outperform smaller ones before the economic downturn, Jarvis said, but when the financial crisis hit, the focus on alternative assets contributed to the decline of large endowments.

Smaller endowments fell less than larger ones immediately after the recession hit, Jarvis said, because they relied less heavily on alternative assets. As endowments began to recover across the country, smaller ones were bolstered by the relatively strong performances of United States securities and domestic and international equities.

But now, Jarvis said, diversified assets are helping universities with larger endowments regain ground. In fiscal year 2011, endowments worth more than $1 billion returned an average of 20.1 percent, while those worth less than $25 million returned only 17.6 percent on average.

“Although domestic equity markets and international markets have remained relatively strong, the diversified portfolio and the strengths of the diversification strategy are beginning to reassert themselves,” Jarvis said.

Swensen declined to comment for this article.

Endowments valued at more than $1 billion, such as Yale’s, returned an annual average of 6.9 percent over the past 10 years.