Yale's endowment had another amazing year. Led by Dave Swensen, the fund was up 28%, making it again the best performer of the endowments. Over the last 20 years the fund has racked up an enviable 15.6% pa return....
After factoring in the university's annual distributions and new donations to the school, the endowment's size increased to $22.5 billion from $18 billion during the previous fiscal year. It is the second largest in the nation behind Harvard University's $34.9 billion endowment.
Yale's 28% return easily exceeded the 17.5% average for foundations and endowments over the period and beat all other endowments with at least $1 billion in assets that have reported year-end results so far, according to the Wilshire Trust Universe Comparison Service.
University officials declined to specify which assets it held or which ones performed the best. But industry observers said that the endowment, under its longtime chief investment officer, David Swensen, is a proponent of commodities and alternative investments, such as private-equity and hedge funds.
"It has one of the largest allocations to alternative investments and one of the best managers of alternative investments," says Allen Proctor, a consultant and the former chief financial officer at Harvard University, referring to Mr. Swensen. "This was a [fiscal] year when many alternative assets did well, and this played to Yale's strengths."
A Yale spokesman declined to say how the endowment fund performed since June 30, a period when a selloff in the credit markets took a toll on many private-equity and hedge funds. Yale said it projects that the endowment will contribute about $843 million during the current fiscal year, or 37% of the university's net revenue.
Yale Endowment's Performance: A+ - Wall Street Journal