Columbia, Brown, Iowa Endowments Lose 7.6%, 4.6%, 2.4%

Falling markets and rising inflation take toll on endowment investment portfolios.

High Inflation and a downturn in global markets continue to batter institutional investors’ portfolios as the endowments for Columbia University, Brown University, and the University of Iowa reported investment losses of 7.6%, 4.6%, and 2.4%, respectively, for the fiscal year ending June 30.

The 7.6% loss for Columbia’s endowment lowered its portfolio’s market value to $13.3 billion from more than $14.3 billion at the end of fiscal year 2021, when it returned 32.3%. The Columbia University Investment Management Company, which manages the university’s endowment, said its 10-year return is 8.8%. 

“The university’s endowment results were negatively impacted by the dramatic reversal in the equity markets during the second half of the year,” Columbia IMC President and Chief Executive Officer Kim Lew said in a statement. “Many of the investments that outperformed over the past few years suffered steep declines, even if on a long-term basis they remain positive contributors. We are actively continuing the work we began over a year ago to reposition the portfolio, at more reasonable valuations.”

The asset allocation as of the end of the fiscal year was 52% in core fixed income, 21% in non-U.S. international equities, 17% in U.S. large cap equity and global equity funds, and 10% in high-yield fixed-income securities.

Meanwhile, Brown University said that as a result of its 4.6% loss, the endowment’s total market value decreased to $6.5 billion during the fiscal year from $6.9 billion in 2021 when Brown led the Ivy League with a 51.5% investment return. However, it said that despite the loss, the university outperformed the S&P 500, which declined 10.6% over the same period, and the Cambridge Associates’ preliminary mean and median loss of 6.0% for colleges and universities.

“While recent years have been rich with opportunities to grow the Brown endowment, fiscal year 2022 proved to be a moment when the protection of assets was our paramount goal,” Chief Investment Officer Jane Dietze said in a statement.  “As the world grappled with continued negative impacts of the COVID-19 pandemic, new geopolitical conflicts, the highest inflation rates in decades and monetary tightening by central banks, markets delivered substantial losses across the board.”

Brown said its endowment has produced $4.8 billion in investment gains over the past decade, and has three-, five-, 10-, and 20-year average annualized returns of 17.4%, 15.5%, 12.3%, and 10.0%, respectively. Brown’s 10-year average historical asset allocation is 31% in absolute return, 25% in private equity, 23% in public equity, 9% in real assets, 7% in fixed income, and 5% in cash.

And the University of Iowa’s 2.4% loss looks downright impressive compared to what most endowments with fiscal years ending June 30 have been reporting. It also reported three-, five, and 10-year annualized returns of 7.1%, 6.9%, and 7.6%, respectively.

Real assets were the top performer for the endowment’s portfolio, returning 20.7% for the fiscal year, followed by diversifying strategies, which earned 5.5% during the year. Global fixed-income investments were down 4.1% for the year, while global equities lost 8.9%. Iowa’s target asset allocation is 59% in global equity, 17% in diversifying strategies, 15% in real assets, and 9% in fixed income.

“Risk assets struggled due to persistent inflation, rising interest rates and a slowing economy,” University of Iowa CIO Jim Bethea wrote in the endowment’s quarterly investment report. “Traditionally, fixed income acts as a hedge to equities, but the rising rate environment pushed correlations to one as prices fell. Real assets also fell in the quarter but remain a bright spot for the fiscal year.”


Related Stories:

Columbia Endowment Names Kim Lew CEO

Brown Leads Ivies for Third Year in a Row, as Columbia, Harvard Lag Behind

MIT, Bowdoin Endowments Lose 5.3%, 7.1% in Fiscal 2022



Tags: , , , , , , , , ,