(September 17, 2012) — It’s been a solid fiscal year for the Massachusetts Institute of Technology Investment Management Company (MITIMCo), which has just announced it returned 8% on its $10.3 billion endowment.
In comparison, the equity-heavy portfolio, which has only 6% allocated to fixed-income, gained 17.9% in the fiscal year ending June 30, 2011.
“We grew net assets to a record level, and our endowment, aptly managed by MITIMCo and propelled by the generosity of our donors and friends, also achieved its highest market value in history, surpassing its highest level before the fiscal 2009 financial crisis,” said Israel Ruiz, MIT’s executive vice president and treasurer, in his FY 2012 report.
MITIMCo identifies itself as a long-term value investor focused on inefficient markets, and holds more than 70% of its assets in private equity, real estate, real assets, and marketable alternatives. Despite the endowment’s strong recent returns, MIT has been rolling back commitments to financial aid for middle-to-low income students.
Princeton’s endowment, in contrast, has likely earned between 0% and 5% for the past fiscal year, the university’s President Shirley Tilgham told Bloomberg News. These returns won’t counter inflation, as university increases its budget by 5% automatically every year. The $17.1 billion fund, which is the fourth-largest in higher eduction, will release its earnings statement by the end of this month.
The Ivy League school’s endowment took a serious hit in the financial crisis, dropping by 24% in the fiscal year ending June 30, 2009. In the wake of these losses, Princeton’s Chief Investment Officer Andrew Golden said the endowment would drop half of its private equity managers, create a $100 million liquidity fund that is separate from the endowment, and rebalance asset allocations.