Brown’s Returns Beat the Big Boys of the Ivy League

It’s the little endowment that could. Brown’s $4.7 billion fund is the smallest of the eight Ivy League schools.

Brown’s 12.1% return beat its larger peers, including Harvard, whose $41.9 billion fund gained 7.3%, and Yale, whose $31.2 billion rose 6.8%. The University of Pennsylvania’s $14.9 billion was up 3.4%, Columbia’s $11.3 billion returned 5.5%, and Dartmouth’s $6 billion gained 7.6%. Princeton and Cornell haven’t reported.

While performance of school endowments mostly trailed the S&P 500’s 7.5% gain (including reinvested dividends) in the 12 months through June 30, they’re outpacing all U.S. endowments, which posted a median 2.6% return, before fees, according to Wilshire Trust Universe Comparison Service. College-endowment returns are net of fees. Endowments took baths when Covid hit and the market plunged. But those with higher equity allocations fared better once stocks bounced back.

Brown’s fund had an unusual mix: 37% was in private equity, 37% in absolute return (usually hedge funds), and 14% in stocks. The rest was in real assets, fixed income, and cash. “We’re grateful to an outstanding group of external investment managers, who collectively have exercised measured judgment in the face of historic volatility in the financial markets,” says Jane Dietze, Brown’s chief investment officer, in a statement.

Of course, many schools are grappling with financial pressures, which raise the endowment stakes. Brown said it expects a fiscal 2021 loss of $100 million to $165 million. Its endowment provided $171 million, or 14%, of the university’s operating budget in fiscal 2020.

Source: Barron’s

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