Here's How Much Money the Country’s Richest College Endowments Lost Last Year
By Kaitlin Mulhere
Blame it on bad investments. A brand-new study of 815 college endowments finds they had an average investment return in fiscal year 2016 of negative 1.9%—the lowest since the 2008-09 financial crisis. That's just one reason endowments slid in market value this past year, according to the annual NACUBO-Commonfund Study of Endowments, released Tuesday morning. Other key factors were management fees (sometimes in the millions of dollars) and a modest increase in spending. At the country's 10 richest colleges, endowments tumbled an aggregate $2.7 billion in value last year. Those negative market returns came during a period in which the S&P 500 was up 4%. But endowment assets tend to have only a portion of assets in domestic stocks, and other markets were less rosy. An average 20% of endowment assets are invested in global stocks, for instance, and global and emerging market equities were down 9% and 11%, respectively. And so-called alternative strategies, including energy, commodities, and hedge funds—which account for more than half of endowment assets—were down 1.4% during fiscal year 2016, according to the report.
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