Secrets of the Academy: The Drivers of University Endowment Success (PDF; 199 KB)
Source: Harvard Business School Working Papers

Much of the growth in endowment size has been driven by investment performance. As we will shown in the paper,, the top endowments posted impressive returns in 2005, averaging a net real return of 12.3 percent compared to 4.4 percent posted by the Standard & Poor’s 500 index in the same year. Indeed, over the past two decades, a significant number of college and university endowments have been in the top percentile of performance among all institutional investors. Based on rankings of performance of large defined benefit plans from financial research firm SEI, 5 percent of college and university endowments exceeded the top percentile return for corporate pension funds between 1996 and 2005. We investigate the underlying drivers of these high returns and show that performance is related to the size of endowment, the quality of the student body, and the use of alternative investments.

This entry was posted on Wednesday, September 17th, 2008 at 9:32 pm and is filed under Business and economics, Education, Financial issues, Investments, Postsecondary. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.