In this article, we discuss the 5 biggest endowments in the US and their investments. If you want to check out our detailed analysis of the biggest American endowments, go directly to 15 Biggest Endowments in the US and Their Investments.
5. Princeton University
Value: $35.8 billion
Princeton University is another Ivy League institute whose endowment is on the list of biggest endowments in America and their investments. It is valued at $35.8 billion in FY 2022, after a -1.8% loss due to market downturn. It is managed by Princeton University Investment Company (PRINCO).
PRINCO has an equity-securities-favoring investment strategy due to its objective of reaching over 10% return every year on average. The fund is able to tolerate above average volatility and below average liquidity due to low spending requirements.
In terms of asset allocation, private equity dominates its portfolio, with a 30% capital allocation, followed by Independent Return instruments at 24%. It allocates the lowest share of its capital to debt instruments, at 6%.
4. Stanford University
Value: $36.3 billion
Stanford University is one of the most prestigious universities in the US. Its endowment fund was valued at $36.3 billion in its fiscal year 2022 after a net loss of 4.2%. It was 1.8% lower than the average loss in average academic endowment returns of the same period.
Its portfolio in Q3, 2022, comprises equity in 52 corporations. Some of the notable companies include Coupang, Inc. (NYSE:CPNG), Meta Platforms, Inc. (NASDAQ:META) and Alphabet Inc. (NASDAQ:GOOG) with shares worth $19 million, $14 million and $53 million, respectively. Its top holding is $492 million worth of shares in iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF).
In terms of major asset allocations, 30% of the university’s endowment capital is allocated to private equity, 21% for absolute return funds, 19% in global equity and 8% in real estate, according to Investopedia.
3. Yale University
Value: $41.4 billion
Yale University is an Ivy League university located in New Haven, Connecticut. Its endowment value as of FY 2022, is $41.4 billion, after net-of-fees returns of 0.8%.
Its assets are primarily allocated in debt instruments and absolute return funds (30%), venture capital (23.5%) and leveraged buyout (17.5%), per Investopedia. The portfolio is largely concentrated in Vanguard Emerging Markets Stock Index Fund (NYSE:VWO), with shares worth $12.4 million that make up 67% of its 13F portfolio in Q3, 2022.
Yale’s spending and investment strategy relies on smoothing the impact of short-term market volatility.
2. The University of Texas System
Value: $42.3 billion
The University of Texas System is a government body of the state of Texas that controls 13 educational institutes including eight universities. Its endowment value as of fiscal year 2022 is $42.3 billion, largely due to the royalties it earns from oil and gas through its over two million acres of land in West Texas. The land is leased to nearly 250 drillers, per Bloomberg. In this sense, rising energy prices have been hugely lucrative for the endowment.
Its four major endowment funds include Permanent University Fund, Permanent Health Fund, Long Term Fund and Separately Invested Fund. In addition to oil drilling, the endowment is diversified into private and public equity and debt securities among other financial instruments.
1. Harvard University
Value: $50.9 billion
Harvard University’s endowment is the largest in the US. It is valued at $50.9 billion after a 1.8% loss in returns in the fiscal year 2022. The endowment comprises a staggering 14,000+ individual funds that are diversified across different sectors.
The endowment’s major capital allocations are in hedge funds, at 36.4% and private equity, at 23%. It is managed by Harvard Management Company, a Harvard-University-owned subsidiary.
Harvard’s strategy is to generate long-term growth without exceeding the endowment’s risk tolerance. It is invested in 47 equity securities as of Q3, 2022, with shares of Alphabet, Meta and Light & Wonder Inc. together accounting for 62% of its portfolio.
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