Per the NACUBO-TIAA's latest Study of Endowments report, college and university endowments reported 8% losses on average on investments in the fiscal year ending June 2022.
Endowments with over $1B in assets under management (AUM), representing 20% of the surveyed respondents, reported 4.5% in average losses. However, endowments with less than $25M AUM reported average losses of 11.5%, much higher than others, due to a lack of access to alternative investment strategies, such as venture capital, private equity, and hedge funds.
The losses reported by endowments are the largest since 2009.
- In 2021, the same endowments reported a 30.6% average gain.
- In the 678 colleges and universities surveyed, the market value dropped by 3.8% YoY to $807B.
- Due to macroeconomic volatility and heightened inflation, endowments set the annual target return at 8.2%, up from the standard figure of 7.5%.
- The report predicts that the true extent of losses reported by bigger funds may be fully realized in the next fiscal report, as alternative investments trail the public market drops by three to six months.
- On average, 63% of assets in endowments with over $1B were deployed in alternative funds.
