Yale, Brown, Duke, Michigan State Earn Double-Digit Returns

The investment portfolios for the endowments of Yale, Duke, Brown, and Michigan State universities reported double-digit gains for fiscal year 2018, earning 12.3%, 13.2%, 12.9%, and 11.1%, respectively, and easily beating Cambridge Associates’ preliminary mean and median returns for colleges and universities of 8.5% and 8.3%, respectively.

Yale’s endowment earned a 12.3% investment return (net of all fees) for the year ending June 30, boosting its total value to an all-time high of $29.4 billion from $27.2 billion at the same time last year.

The endowment returned 7.4% and 11.8% per year over the 10- and 20-year periods ending June 30. Domestic equities returned 12.4%, beating its benchmark by 2.2%, while foreign equities returned 14%, outperforming its composite benchmark by 10.6%. Venture capital and leveraged buyouts returned 16% and 10.2%, respectively, while real estate and natural resources contributed annual returns of 2.7% and 1.7%.

Duke University reported that its endowment’s long-term investment portfolio returned 12.9% for the fiscal year ended June 30, to help raise the fund’s total asset value to a record high of $8.5 billion, up from $7.9 billion at the same time last year. The endowment has nearly doubled since the financial crisis of 2008-2009, when it was valued at $4.4 billion.

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“So the economy is obviously doing much, much better,” Jack Bovender, chairman of the board of trustees, said at the board’s most recent meeting, according to Duke’s student newspaper, The Chronicle. “Stock prices have gone up significantly. The Dow Jones has gone up significantly, and so has our returns.”

Duke’s endowment had three- five- and 10-year annualized returns of 7.4%, 9.2%, and 6.6%, respectively, according to Bloomberg News.

Brown University’s endowment produced a 13.2% return for the fiscal year, surpassing its benchmark of 9.7%, and raising its value to an all-time high of $3.8 billion.

The three-, five-, 10-, and 20-year annualized returns for Brown’s endowment are 8.3%, 9.2%, 5.9%, and 8.3%, respectively.

“We are fortunate both to partner with outstanding investment managers who navigate the markets skillfully and to be guided by an Investment Committee of exceptionally knowledgeable investors,” Brown CIO Jane Dietze said in a release.

And the investment portfolio for Michigan State University’s endowment returned 11.1% for the fiscal year ended June 30 to bring its total asset value up to more than $2.9 billion. The endowment also reported three-, five-, and 10-year annualized returns of 7.2%, 8.4%, and 6.0%, respectively.

“While our public equity and hedge fund portfolios beat their respective benchmarks, performance was driven by strong returns in our private equity and private real estate portfolios,” Michigan State University CIO Philip Zecher said in a release.

Tags: Brown University, Duke, Endowments, Fiscal 2018, Michigan State University, Returns, Yale

An extra $7.6 billion from the government will help finance the operation, which gradually raises the national retirement age over the next five years.

President Vladimir Putin made Russia’s unpopular pension reform, which will gradually raise the national retirement ages through 2023, official Wednesday.

The bill was approved by the Federation Council, Russia’s upper house, several hours before Putin’s decision.

Under the new provision, which seeks to stabilize the nation’s economy, men will now wait until age 65 to collect their benefits. Women can do so at age 60. The previous retirement ages were 60 for men and 55 for women.

The ages will increase gradually until 2023 to the new levels.

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Putin told cabinet members Tuesday that no additional budget revenue was expected from the move. Finance Minister Anton Siluanov said the government will transfer ₽500 billion ($7.6 billion) to the state pension fund to finance the operation.

“It is true, we do not expect any additional revenue from the pension law changes and, on the contrary, we will even increase financial transfers to the Pension Fund,” he told the Moscow Times.

The reforms have been an issue in Russia since June, when an earlier version passed in the lower house, known as the State Duma. Constant protests and diminishing approval ratings meant Putin, who had previously said the pension laws would not be touched under his rule, had to intervene. He did so in a televised broadcast in August, but rather than revoke the bill before its second of three Duma readings, the president softened it up.

Putin rolled back the initially proposed pension hike for women (age 63), and also added several security measures for those within five years of retirement, which included a higher unemployment collection and a clause that would penalize companies for discriminating against them. The pre-retirement incentives were also approved.

These changes, however, did not appease citizens, especially the age boost. Given the average life expectancy in Russia is 66 for men and 77 for women, most residents are now considering their retirements a pipe dream. The younger generation is also worried that they will find employment difficult as the old must work longer at their jobs that are now better protected.

A mid-September poll by the independent Levada Center showed 11% of Russia’s population supported the policy. The number of willing protesters, however, decreased by 53%, to 35%—a telltale sign that many a Russian had given up on a clawback.

Tags: Pension, Russia, Russian Pension Reform, Vladimir Putin