University of Michigan Endowment Returns 8.93% in Fiscal 2024

The University of Michigan’s endowment reported an 8.93% investment return for the fiscal year that ended June 30, compared with a 5.2% return last year, to help raise its total asset value by $1.3 billion to $19.2 billion.

The endowment, a collection of more than 13,000 separate funds that is organized similarly to a mutual fund, also reported record distributions of $506 million, breaking last year’s record of $470 million.

In addition to the annual gain, the endowment announced its investment portfolio has an annualized return of 9.6% over the past 25 years, when the university first created a separate investment office. According to the announcement, the endowment was ranked well within the top quartile of U.S. endowments at higher education institutions by Cambridge Associates, which is also the university’s investment consultant.

The university, which has nearly 53,000 students, also stated that the endowment ranks 80th among all U.S. universities on a per-student basis, citing a recent report from the National Association of College and University Business Officers.

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In fiscal 2023, NABUCO data placed the University of Michigan as the ninth-largest university endowment in the U.S. and the third-largest public university endowment, trailing the University of Texas System and the Texas A&M University System.

The university did not release its investment performance by asset class or its annualized returns other than its 25-year performance; however, it stated plans to release a detailed endowment investment report after its board of regents meeting on December 5.

In addition to the investment returns, the university also highlighted its sustainable investments, saying it estimates it could offset 25% of the endowment’s carbon footprint by the end of the current fiscal year and reach net zero by the end of fiscal 2030.

“U-M has become an established leader in energy-transition investments in higher education and is well on its way to transition the investment portfolio to net zero much sooner than the 2050 goal,” CIO Erik Lundberg said in a statement.