Cornell University Investments Gain 13%, Beating Returns at Harvard, Yale

Cornell University’s investments rose 13 percent in the year ended June 30, beating the returns at Harvard and Yale, the two richest U.S. universities.

The fund’s long-term investments were valued at $4.4 billion as of June 30, the Ithaca, New York, school said today in an e-mailed statement. The $27.4 billion fund at Harvard, in Cambridge, Massachusetts, gained 11 percent, while the $16.7 billion fund at Yale, in New Haven, Connecticut, increased 8.9 percent, the worst performance among the six Ivy League schools that have reported returns so far.

Cornell generated an average annual return of 4.6 percent in the five years through June, compared with the 4.7 percent gain at Harvard and the 3.1 percent median return of public and corporate pensions, endowments and foundations tracked by Wilshire Associates Inc., a consulting firm in Santa Monica, California.

“These strong results were a consequence of asset allocation decisions made to protect the university during the financial crisis while also allowing for growth as conditions improved,” the school said in the statement. “The portfolio is well positioned to take advantage of opportunities that may arise as well as to continue to meet the needs of the university.”

James Walsh, Cornell’s former chief investment officer, stepped down at the end of the academic year and started a $150 million hedge fund, Cayuga Capital Partners in London. Senior investment officers A.J. Edwards, David McNiff and John Regan are running the endowment on an interim basis.

Ivy League

The Ivy League consists of eight private schools in the northeastern U.S. Columbia University’s $6.5 billion endowment jumped 17 percent in the past year, while the University of Pennsylvania’s $5.7 billion fund gained 13 percent. Dartmouth College reported a 10 percent return for its $3 billion fund. The Standard & Poor’s 500 Index of stocks rose 12 percent in the year ended June 30.

Princeton University in New Jersey and Brown University in Providence, Rhode Island, have yet to report endowment results.

None of the Ivy League schools has recouped the record losses incurred in the year ended June 30, 2009, after the bankruptcy of Lehman Brothers Holdings Inc. in September 2008 crippled financial markets. As investments tumbled, universities cut jobs, froze salaries and postponed building projects. Cornell had lost 26 percent in the year ended June 2009, mirroring declines at Harvard and Yale.

At least 15 private nonprofit colleges and universities sold bonds to raise cash after the credit collapse, including six of eight Ivy League schools, according to reports from Moody’s Investors Service. They borrowed $7.2 billion, costing them about $360 million a year in interest, according to data compiled by Bloomberg.

Below is a list of endowment results for selected schools.

School           Endowment              Investment
                                        Return

Yale             $16.7 billion            8.9%
MIT              $8.3 billion              10%
Dartmouth        $3 billion                10%
Harvard          $27.4 billion             11%
Cornell          $4.4 billion              13%
Penn             $5.7 billion              13%
Stanford**       $13.8 billion             14%***
Columbia         $6.5 billion              17%

** Fiscal year ended Aug. 31; all others ended June 30.
*** Investment results for 12 months ended June 30.

To contact the reporter on this story: Gillian Wee in New York at gwee3@bloomberg.net.

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net.

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