Yale Endowment Posts 11.5% Return as It Reaches $25.6 Billion

[Purveyor]

Source: Bloomberg

Yale University reported an investment return of 11.5 percent for the year ended June 30.

The value of the endowment rose 8.4 percent to $25.6 billion, according to a statement Thursday. The Ivy League school, based in New Haven, Connecticut, had an annual average return of 10.0 percent over the past 10 years.

It tweaked its asset allocation for the upcoming fiscal year to increase assets in absolute return, foreign equity and reduced target allocation in real estate.

The endowment, led for 25 years by institutional investing pioneer David Swensen, has consistently posted some of the best returns in the industry. Last year, its 10-year annualized performance of 11.0 percent was tied with Columbia University for the best among those with at least $1 billion in assets, according to Bloomberg data.

Read more: http://www.bloomberg.com/news/articles/2015-09-24/yale-endowment-posts-11-5-annual-return-rises-to-25-6-billion?module=TopNews&position=2_headline

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Must be comforting for those burdened with 10's of thousand of dollars in student loans, eh?

[yeoman6987]

1. I was bashed for mentioning endowments the other day

Glad to see I have been proven right once again.

[Purveyor]

2. Oh I get same tripe whenever I post about this outrage. $25 fucking billion dollars, indeed! eom

[TygrBright]

3. But if you're trying to save for retirement, be GRATEFUL for 2.5%... n/t

[whatthehey]

7. They are not doing anything special. That's an average return on a balanced portfolio.

[Calista241]

4. I don't have a huge problem with university endowments.

They use the interest off of that money for capital investments, and to provide scholarships.

[LonePirate]

5. That $2B+ return for the year could fund $100K scholarships for every Yale student

and it would still leave over $775M for capital improvements. Please correct me if I am wrong; but I don't think Yale is doing that, far from it.

[mpcamb]

15. The amount of federal aid to certain Universities seems out of proportion.

Here's an interesting read from Atlantic mag:

http://www.theatlantic.com/business/archive/2014/10/princeton-gets-10-times-as-much-tax-money-per-student-as-public-colleges/381679/

[proverbialwisdom]

14. Money is money? Doesnt matter whether investments are ultimately ethical or predatory? Help or harm?

eg. http://www.usatoday.com/story/money/business/2015/09/23/turing-pharmaceuticals-ceo-martin-shkreli-will-lower-price-of-daraprim/72670124/
eg. http://www.bloomberg.com/news/articles/2015-08-24/blackrock-said-to-start-financing-rental-home-investors

BLOOMBERG has a great app for cord-cutters. Heard this story ("Harvard endowment saved by real estate investments&quot the other day. Made me stop cold and wonder.

http://www.cnbc.com/2015/09/22/harvard-endowment-grows-58-to-record-376b.html

Harvard endowment grows 5.8% to record $37.6B
Tuesday, 22 Sep 2015 | 6:34 PM ET

...The returns for the 12 months ended June 30 were driven by outsized profits in stocks, venture capital investments in technology and biotech, and investments in real estate, HMC said in a letter to alumni published on its web site.

The Ivy League school's endowment is the largest in the world.

http://www.bloomberg.com/news/articles/2015-09-22/harvard-posts-5-8-investment-return-propped-by-real-estate

Harvard Endowment's Performance Lags Peers With 5.8% Return
by Michael McDonald
September 22, 2015

Harvard University said it’s seeking to revitalize the performance of its endowment -- the world’s largest -- after posting a 5.8 percent investment return for the year ended June 30, again lagging its peers.

<>

Alternative Assets

Harvard’s private equity investments gained 11.8 percent, beating a benchmark of 10.8 percent.
Venture capital delivered a 29.6 percent return, driven by technology and biotech sectors, Blyth said.
The top-performing asset class was real estate, which returned 19.4 percent, 790 basis points over the benchmark.

To what extent do these benign activities (maximizing university endowments) underpin the resistance to challenging the status quo?

[burfman]

6. What are they doing with the money? Just sitting on it?

There are roughly 12,500 under & grad students at Yale. The $26 Billion comes out to about two million dollars per student. Tuition is $45,800 for an undergraduate student. The US government in 2013 provided $4.7 million is grants and scholarships to students along with another $1.5 million in work study. In 2012 25 percent of Yale's operating revenue came from grants and contracts with 81 percent of that coming from the federal government. The department of Health and Human Services (which includes NIH) in 2012 gave $419 million in revenue to Yale.

So gee I hope this icon of higher education in America is spending some of that $26 Billion so that perhaps some of the Fed's money might be spent on less fortunate schools.


Burfman

[Ed Suspicious]

10. Yes. Well they invest it and grow it completely tax free. Watch this month's Update with Richard

Wolff. It's kind of infuriating once you see it broken down like Dr. Wolff does.

[Ed Suspicious]

8. Or the city of New Haven. According to Richard Wolff, New Haven is the seventh poorest city in

America. He said something to the effect of "If Yale paid taxes like people and businesses the city of New Haven would have to build a wall to keep people out who seek to take part in the towns riches and opulent lifestyle."

We need to tax all institutions like this.

[choie]

19. I was just going to mention this, Ed...

My husband and I saw Prof. Wolff speak at Judson Church in NY two weeks ago and he talked about Yale's endowment, their non profit status and the lack of support for New Haven. He's spot on, as usual...

[mnhtnbb]

9. I am happy to say that our youngest son is the beneficiary of some of those $$$

as he was given a very nice financial aid package when he was admitted to Yale School of Drama
as a graduate student for an MFA--now in his second year--to the Class of 2017.

[CTyankee]

12. I'm glad to hear that...I don't like my home town bashed all the time...and Yale is

one of its most outstanding institutions. I always think Yale could do more for New Haven but I think I always will, no matter what. Just me.

[No Vested Interest]

11. Perhaps the endowment has so much moolah that they

can afford to take risks that the average personal investor could not afford to take, even with a well-balanced portfolio.

[jtuck004]

13. I wonder whose lives the thieving bastards are profiting from to take their 11.5, since

many people can't get 1%, after working a lifetime for their money?

These universities are full of the low-life hemorrhoids who partner with slumlords like Jamie Dimon, whose money pays for bottom-dwelling politicians that are making students take on a trillion dollars in student loans, crippling the rest of their lives. They have thrown more than 7 million families in the street after their theft of the past few years, and are being rewarded for it.

This university is another beneficiary of a lot of misery, with products that are often defective, and cause great tragedy themselves.

[6chars]

18. Tax them

They made $3 billion last year - something like $300k per student (they did not spend that much), paid out lots of 7 or 8 figure bonuses to their investment managers. This is an investment fund with a college attached to it to get a huge tax break by pretending it is non-profit. Same goes for their peers. Use the tax dollars to fund aid for 99%.

[Psephos]

20. +1000

Why in hell does a $25 billion hedge fund not pay taxes?

[daleo]

21. Piketty noted this sort of thing in his book

Large accumulations of capital tend to earn much higher returns on investment, concentrating wealth in fewer hands. It is self reinforcing.

[proverbialwisdom]

22. Related.

http://www.bloomberg.com/news/articles/2015-12-10/stanford-collects-1-6-billion-in-donations-surpassing-harvard

Stanford Collects $1.6 Billion in Donations, Surpassing Harvard

By Michael McDonald
December 10, 2015 — 1:54 PM PST

http://www.bloomberg.com/news/articles/2015-01-28/harvard-beats-stanford-raising-record-1-16-billion-in-a-year

Harvard Beats Stanford, Raising Record $1.16 Billion in a Year

By Janet Lorin
January 27, 2015 — 9:00 PM PST