Yale Endowment Achieves 5.6% Return in 2024 Fiscal Year

The endowment of Yale University returned 5.6% in fiscal 2024, the university announced late last week, marking the second-lowest return out of its Ivy League peers. Assets managed by the Office of Investments increased to $41.4 billion, with investment gains of $2.3 billion.

The endowment distributed $2 billion during the fiscal year to support university operations and received $231 million in gifts. After gifts, investment returns and distributions, assets of the endowment increased by $700 million.

Yale CIO Matt Mendelsohn attributed the returns to a lag in the returns of private markets assets. Yale and its former CIO, the late David Swensen, are known for pioneering the “Yale model,” a portfolio strategy highly allocated to alternative investments, particularly illiquid, private market investments.

“Given our significant allocation to private assets, we expect to lag during periods of strong public market performance, particularly when exit markets for private assets are depressed,” Mendelsohn said in a statement. “As always, we remain focused on achieving investment success over the long term, knowing that doing so is likely to bring stretches of short-term underperformance.”

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Yale’s endowment return trailed all other Ivy League institutions except Princeton, which returned 3.9% in the period. In fiscal 2023, the Yale endowment returned 1.8%, and it returned 0.8% in 2022, two weak years for returns in the private markets.

Despite recent weakness in private market returns, Yale’s endowment returned an annualized 9.5% and 10.3%, respectively, over the past 10- and 20-year periods. The endowment noted in its announcement that these returns exceeded a 70/30 portfolio by 3.8% over both the 10- and 20-year periods.