Asset AllocationSeptember 30, 2022

Penn, Dartmouth, University of Minnesota Endowments Swing to a Loss in 2022

Investment portfolios see sharp reversal from last year’s record returns.

Reported by Michael Katz

In a sharp turnaround from last year’s record high returns, the investment portfolios for the University of Pennsylvania, Dartmouth College and the University of Minnesota endowments all declined in 2022. Penn’s endowment was negligibly lower, while Dartmouth’s and Minnesota’s endowments lost 3.1% and 5.8%, respectively, for the fiscal year ending June 30.

The Penn Office of Investments said that Penn’s endowment produced an investment return of 0.0% for the year ending June 30. However, according to its annual report, the endowment’s investments actually closed the year down $83.9 million. But due to new gifts and other sources, the endowment’s asset value increased by $200.8 million during the year to $20.7 billion. For the 2021 fiscal year, the endowment posted a record return of 41.1%.

Penn’s portfolio has produced five- 10- and 20-year annualized returns of 11.9%, 11.1% and 9.0%, respectively, beating its benchmark’s returns of 10.3%, 9.2% and 7.8%, respectively, over the same time periods.

The Dartmouth portfolio’s 3.1% loss brought the endowment’s asset value to $8.1 billion as of the end of the fiscal year. A Dartmouth news release says the college outperformed its benchmark, but did not report its benchmark’s performance. Without citing figures, the release also says its long-term performance is “well above” its benchmark’s performance with three-year, five-year and 10-year annualized returns of 15.1%, 13.0% and 11.8%, respectively, as of June 30. Dartmouth’s endowment produced a return of 46.5% during fiscal year 2021.

“Dartmouth’s endowment is well prepared for the market volatility we experienced this year,” Chris Lord, chair of Dartmouth’s board of trustees’ investment committee, said in a statement. “While the performance was slightly negative on a one-year basis, our focus and investment strategy are designed to ensure that Dartmouth is positioned for exceptional long-term, risk-adjusted results.”

Meanwhile, the investment portfolio for the University of Minnesota’s endowment lost 5.8% for the fiscal year ending June 30, bringing its asset value to $3.1 billion. Although this is well off last year’s 38.7% return, the university easily beat its benchmark, which lost 15.0% for the year.

An endowment update from the university says the portfolio, which is invested by UMF Investment Advisors, is intended to be highly diversified and actively managed, and has less reliance on traditional common stock exposure than a standard 65/35 equity and bond mix. The portfolio’s asset allocation is 44.0% in global equity, 28.0% in private equity, 25.8% in credit and reinsurance and 2.2% in Treasury bonds.