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Alternative Market Briefing

Endowment study reveals decline in allocation to alternative assets

Thursday, November 07, 2013

Beverly Chandler, Opalesque London:

The 2013 NACUBO Commonfund Study of Endowments or NCSE’s preliminary data gathered from 461 U.S. colleges and universities shows that these institutions’ endowments returned an average of 11.7%, net of fees, for the 2013 fiscal year (July 1, 2012 – June 30, 2013). These preliminary figures show that this is a significant increase on the -0.3% return reported by study participants for the 2012 financial year.

NCSE’s data is broken down into six categories according to the size of the endowment, ranging from institutions with endowment assets under $25m to those with assets in excess of $1bn. NCSE says that fiscal year 2013 returns were very consistent across five of the six size cohorts, ranging from 11.2% to 11.8%. Institutions with assets between $501m million and $1bn billion reported average returns of 12.7%.

NCSE reports that additional findings based on preliminary data—drawn from the sample of 206 institutions that have completed the survey—show that participating institutions’ trailing three-year returns averaged 10.4%; trailing five-year returns averaged 4.3%; and trailing 10-year returns averaged 7.1%. Endowments with assets under $25 million reported the highest average three year return, at 11.0%, while those with assets between $25 and $50m reported the highest average five year return, at 5.5%. Endowments with assets ......................

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