A Win is a Win for the Yale Endowment

Yale's been cutting private equity and real estate for years to stay liquid. Did they cut too much, or did they find the right balance for FY2022?

October 13, 2022

When UPenn posted its 0% FY2022 return last week as the first Ivy to report, it perfectly set up two themes for the year. First, it was a very, very good year to be in real assets. Second, CIOs continue to move towards private equity to find returns they can no longer get from hedge funds and public equities.

In UPenn’s case, our quantitative estimates (inferred from annual endowment returns) showed a 2.67% return on private equity, with boosts from natural resources and real estate. Together, these overcame drawdowns from hedge funds (-2.84%) and US equity (-1.95%) to land the endowment at a perfect zero return for the year.

And now Yale reports a similar story, but with a slightly happier ending. The $41.4B Yale endowment posted a 0.8% return for FY2022, driven by strong real asset performance and its exposures to private equity.

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