Stanford, Cornell Endowments Return 11.3%, 10.6%

University portfolio values rise to $26.5 billion, $7.2 billion, respectively.

The investment portfolios for the endowments of Stanford and Cornell universities returned 11.3% and 10.6%, respectively, for the fiscal year ending June 30, as both surpassed the median 8.3% return for US colleges and universities.

Stanford Management Co., which oversees the investments for Stanford University’s endowment, reported an 11.3% investment return, net of all fees, to help raise its endowment’s total value to $26.5 billion, up from $24.8 billion at the same time last year. The returns translated to $3 billion of investment gains.

“Our results were bolstered by significant value added above benchmark results in our public equity portfolios, where we have worked to upgrade our capabilities over the last three years,” Robert Wallace, CEO of Stanford Management Co., said in a release. “Performance in illiquid asset classes, including private equity, was strong in absolute terms, but trailed our expectations in relative terms. Our efforts to reposition the illiquid asset classes are still in early stages and will require more time to complete.”

Stanford had five- and 10-year annualized returns of 9.4% and 6.3%. respectively, ahead of the 7.2% and 5.5% annualized median returns for colleges and universities over the same time periods.

Meanwhile, Cornell University’s endowment returned 10.6% for the year ending June 30, raising the total value of its investments to $7.2 billion from $6.8 billion at the end of fiscal year 2017. The university said the gains were led by the endowment’s private equity investments, global equities, and enhanced fixed income.

“We have restructured our portfolios over the last 12 months and are pleased that they have outperformed our strategic benchmark by about 110 basis points,” Girish Reddy, chair of Cornell’s investment committee, said in a release. “We continue to expect strong performance in fiscal year 2019 as the portfolios reap a full year’s benefit.”

Cornell’s Office of University Investments made several changes to its portfolio strategy and management over the past year, including overhauling its benchmarks, strategic asset allocation, managerial lineup, operational capabilities, and informational systems. The office said the changes are intended to boost performance over time, increase endowment flexibility, reduce fees, and improve responsiveness to changing investment trends.

“Following deep-dive reviews, we’ve implemented an interrelated set of initiatives aimed at improving the portfolio’s strength and resiliency, and those began to come to fruition in fiscal year 2018,” said Cornell CIO Kenneth Miranda in a release. “We expect to continue to see the effects of those improvements as we move forward.”

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