Yale returns 28 percent, beats peers

The alternatives-focussed Yale University endowment returned 28 percent this year, up 5.1 percent percent from 2005. The endowment is now valued at $22.5 billion, up 25 percent from 2005.

The Yale University endowment returned 28 percent for the fiscal year ending 30 June 2007, up from 22.9 percent in 2005. The endowment's total value has risen 25 percent to $22.5 billion (€15.9 billion) from $18 billion. The US endowment, which allocates roughly 17 percent of its portfolio to private equity, returned more than any other university endowment this year, according to The Wall Street Journal.

sitting pretty

Yale's return was well ahead of the national average of 17.5 percent for foundations and endowments with at least $1 billion in assets, according to the Journal, and five percentage points ahead of Harvard University's endowment, the only university endowment larger than Yale's. Over the past ten years the Yale endowment has returned an annualised 17.8 percent, the university said in a statement.

Led by chief investment officer David Swensen, Yale allocated 55 percent of its portfolio to alternatives last year, 16.4 percent of which went to private equity funds. Details as to returns generated by individual asset classes were not disclosed, and Swensen declined to comment.

Since 1973, Yale has committed at least $2 billion to 60 to 70 private equity funds, including funds managed by GP Investimentos, Castanea Partners, Pacific Equity Partners, Sun Capital Partners and Welsh Carson Anderson & Stowe.

The university also invests frequently with venture capital funds, though it recently was ousted from Sequoia Capital's limted partner roster, reportedly after declining to participate in the VC firm's funds targeting later stage investments in Israel and China.