Endowment swells to record $42.3B

Investments earn best return since 2000

NEW HAVEN — Yale University’s endowment hit a new record of $42.3 billion, with the highest investment return since 2000, according to the university.

It was the last fiscal year in which the late David Swensen played a role. Swensen died May 5 after a long battle with cancer.

The return for the fiscal year ending June 30 brought a net gain of $11.1 billion to the endowment, up from the previous record of $31.2 billion. Yale reported the net gain in its investments as 40.2 percent, the highest since fiscal 2000, when the endowment

grew 41 percent. That year the entire endowment totaled $10.1 billion.

“It was an extraordinary year for the endowment, which will benefit the Yale community now and for generations to come,” said Matt Mendelsohn, Swensen’s successor as chief investment officer, in a release. “While we are pleased with this gain, we define success over longer periods of time, measured by our ability to provide stable and growing support to the university so that it can carry out its mission.”

Yale’s endowment is second to Harvard University’s, according to US News. Harvard this year reported an increase of 33.6 percent to $53.2 billion, according to the Harvard Crimson.

Yale two weeks ago launched a $7 billion capital campaign, “For Humanity.” Mayor Justin Elicker and the Yale unions have called on the university to contribute more to the city. In 2020, Yale made a voluntary payment of $13 million, as well as supporting programs for city high school students, employee housing and others.

Distributions to Yale’s operating budget during the last fiscal year totaled $1.5 billion, 35 percent of the budget, according to the release.

Swensen has been credited with using novel strategies to increase the university’s earnings, including public equities, absolute return, leveraged buyouts, venture capital and real assets. He had led the investments office since 1985.

“The goal of Yale’s investment and spending policies is to be equitable in providing resources across the generations of the university’s students, faculty, and staff, now and far into the future,” said Yale President Peter Salovey in the release. “Strong long-term performance of the endowment allows Yale to remain vital for future generations.”

The endowment returned an average 12.4 percent over the last 10 years, compared with 9.1 percent for colleges and universities, according to the release. Over the last 20 years, the endowment returned 11.3 percent, compared with 7.7 percent nationally.

The endowment provides the largest source of revenue for Yale. Twenty-four percent is unrestricted, 25 percent supports teaching and research, 19 percent goes to facilities and operations and 18 percent toward financial aid. The rest is designated for specific departments or programs.

Yale offered financial aid to 61 percent of undergraduates for the 2020-21 academic year, with the average award totaling $58,340, or 78 percent of tuition, room and board, according to the release.