Photographer: Emile Wamsteker/Bloomberg

Princeton University Endowment Posts 12.5% Annual Return

  • Fund’s 10-year gain of 7.1% is in top percentile among peers
  • Andy Golden has run the Princeton endowment since 1995

Princeton University’s endowment earned an investment return of 12.5 percent in fiscal 2017, fueled by a bull market in global equities, while slightly underperforming smaller funds with less complex portfolios.

The endowment’s value rose by $1.6 billion to $23.8 billion for the year ended June 30, the university said Monday in a statement. The average return for more than 450 endowments and foundations was 12.7 percent, according to early data from Cambridge Associates.

The university said its 10-year annual average return of 7.1 percent was in the top percentile among peers, including endowments and other institutions. Princeton counts on earnings from the endowment for more than half of its operating budget, according to the statement.

“These earnings enable the university to provide generous financial aid that makes it possible for any student who is admitted to attend, regardless of ability to pay and without the need for students to take out loans," Deborah Prentice, Princeton’s provost, said in the statement.

Asset Allocation

In the previous fiscal year, Princeton and Yale University were the only members of the eight-member Ivy League to earn a positive return. Schools with higher allocations to equities saw some better returns in fiscal 2017. Princeton’s target allocation was 25 percent each in private equity and hedge funds, and 19 percent in real assets, according to its annual report. The fund also has 10 percent in domestic stocks and 6 percent in international equities.

Endowments over $1 billion allocated 13 percent on average to U.S. stocks and 19 percent to international equities, according to data for fiscal 2016 collected by the National Association of College and University Business Officers.

Among the other Ivies to report so far, Dartmouth College leads with a 14.6 percent gain while Harvard University is the lowest with an 8.1 percent return. The University of Pennsylvania and Cornell University posted returns of 14.3 percent and 12.5 percent, respectively.

Andy Golden has led the Princeton University Investment Co., known as PRINCO, since 1995. He previously worked at Yale University’s endowment, whose former staff also run school funds at the Massachusetts Institute of Technology, Stanford University and Bowdoin College.

    Before it's here, it's on the Bloomberg Terminal.