Harvard University’s endowment earned an investment return of 2.9% during the latest fiscal year, beating rival Yale University and most other Ivy League peers but lagging far behind plain old US stocks.
Returns were “mildly negative” in venture capital/growth investments and only slightly positive in private equity, Harvard said in a financial report. The value of the endowment, the largest in US higher education, edged down to $50.7 billion after accounting for outflows to pay for university expenses and inflows from gifts.
Harvard’s performance underscores the lackluster results at big college funds during the 12 months ending in June as returns fizzled in alternative assets such as venture capital even as the S&P 500 jumped 18%. Endowments with less than $500 million, which typically invest more heavily in US stocks, earned a 10% median return compared with 6.2% for larger funds, according to Wilshire Trust Universe Comparison Service, which doesn’t name individual schools.
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