NEPC’s mega-endowments white paper data was recently featured in an article to discuss how smaller funds with a greater focus on equities outperformed larger endowments that had higher allocations to private markets during a strong year for artificial intelligence and tech stocks. View the full article on Chief Investment Officer’s site here.
In fiscal 2024, university endowments followed a similar trend as the prior year: Endowments with a higher allocation to equites were top performers, while endowments with higher allocations to private markets often saw single-digit returns.
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The median endowment, out of 78 endowments NEPC tracked, returned 11.9% in the fiscal year.
“The [UC San Diego Foundation’s] success stems from a unique approach to endowment management that is a particularly good fit for current market trends,” Colin Hatton, an NEPC principal for endowments and foundations, wrote in the NEPC report. “They utilize several University of California General Endowment Pool accounts, enhancing them with their own strategic position which consists primarily of U.S. large-cap equity. It’s a hybrid approach that allows them to benefit from the University of California Investment Office’s resources while employing an asset allocation that meets their own needs.”
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“We also believe that private equity and venture capital aren’t likely to remain underperforming sectors for an extended period of time,” the NEPC report noted. “Both segments needed to endure a period of repricing in an environment of higher interest rates, but we think that cycle will come to an end now that interest rates are expected to remain stable or come down.”
Click here to read the full article on the Chief Investment Officer site.