Notre Dame, USC Endowments Return 53.2%, 43.2% for 2021

Robust returns raise the asset values for Notre Dame and USC’s endowments to $20.3 billion and $8 billion, respectively.

The investment portfolios for the University of Notre Dame and the University of Southern California (USC)’s endowments returned 53.2% and 43.2%, respectively, for the fiscal year that ended June 30. For Notre Dame, it was the second-highest one-year return in its history, raising its asset value to just under $20.3 billion, as of the end of the fiscal year. Meanwhile, USC’s returns increased its endowment’s asset value to just over $8 billion.

Notre Dame easily surpassed its benchmark’s 28.3% return, and raised its five-, 10-, and 20-year annualized returns to 17.4%, 12.8%, and 10.6%, respectively. Over the same time periods, the endowment’s benchmark has recorded annualized returns of 10.5%, 7.5%, and 6.2%, respectively.

“The investment portfolio is highly diversified across strategies, sectors, and geographies with a high allocation to equities for growth to support university finances,” Notre Dame said in its annual report. “To further diversify exposure to public and private equities, the multi-strategy portfolio provides allocations to a variety of other assets and risk-reducing approaches with return streams less correlated to the equity markets.”

As of the end of the fiscal year, the portfolio’s asset allocation was 45.9% in private equity, 31.2% in public equity, and 22.9% in a multi-strategy class.

Meanwhile, USC’s 43.2% return outpaced both a blended 70% MSCI All Country World Index/30% Bloomberg US Aggregate Bond Index, and the Consumer Price Index (CPI) plus 5% over the near, medium, and long term. The endowment reported five-, 10- and 20-year annualized returns of 13.7%, 9.9%, and 8.2%, respectively. The 70/30 benchmark registered annualized returns of 11.3%, 8.1%, and 6.8%, respectively, over the same time periods, while the CPI plus 5% benchmark returned 7.4%, 6.9%, and 7.1%, respectively.

The current asset allocation for USC’s portfolio is 45.5% in global equity, 18.4% in venture capital, 9.4% in absolute return, 8.4% in private equity, 5.6% in natural resources, 5.2% in fixed income, 4.4% in real estate, and 3.2% in cash.

“The university employs a long-term and active investing philosophy that responds to changing environments and takes advantage of valuation extremes,” the USC Investment Office said in the endowment’s annual report. “This approach is designed to enable the endowment to grow in real terms, providing meaningful annual returns that keep pace with inflation, while minimizing risk and volatility.”

Related Stories:

What Makes the Yale Model of Investing So Successful?

MIT, Brown Endowments Report Over 50% Returns for 2021

Britt Harris and UTIMCO’s Next CIO Rich Hall Discuss Plans for the Endowment’s New Era

Tags: , , , , ,