Endowments

A deeper look inside the investment returns of some of the most prestigious endowments in the world.

Every fall brings with it excitement and some surprise in a much-watched annual contest. No, we’re not talking about the World Series but rather endowment-reporting season when most schools report their fiscal year investment returns.

In this section of our Research we will focus on analyses of the top endowment funds using MPI Stylus, which has become a solution for investors assessing complex funds and those with limited data disclosures (e.g., hedge funds). The project below is an attempt to bring more transparency to the opaque world of some of the most largest and successful investors in the world. MPI’s analyses provide insight into these top endowments that cannot be achieved using other methods and suggests reasons for the range of performance outcomes they report.

In-depth Endowment Research

We provide some clues as to why some of the largest endowments have disappointing results in FY2023

The projections come from MPI’s Transparency Lab, which provides unique insights into the styles, risks, and performance of traditionally opaque pensions and endowments.

For the past 20 years Texas Teachers Retirement System’s performance mimics the average of large public pensions tracked by MPI Transparency Lab.

MPI Transparency Lab projects a complete reversal of FY2022 results for U.S. public pensions with last fiscal year’s winners projected to have low single digit returns in FY2023. Funds are lagging due to their exposure to poor performing private equities and commodities and winning because of exposure to global equities.

Endowments and pensions continue to post gains, but exposure to private markets pushes many below benchmarks

MPI Transparency Lab Analyst Commentary

About eight years ago, Columbia University’s endowment had a 10-year return that was one of the best in class, together with MIT and Yale.

Most endowments have been propped up by a similar concentration in private assets. The ones that suffered the worst, however, couldn’t have been more different in their approach.

Yale’s been cutting private equity and real estate for years to stay liquid. Did they cut too much, or did they find the right balance for FY2022?