Yale posts 12.6% 20-year LBO returns

Thanks to the internet boom, venture capital has been the endowment's best-performing asset class.

Yale University’s endowment posted an 11.3 percent net investment return for the year ending 30 June.

The endowment’s value grew from $25.4 billion a year previously to $27.2 billion, according to a statement.

Yale also revealed 20-year asset class performance for the fund. Its leveraged buyouts investments returned 12.6 percent for the period, while venture capital returned 106.3 percent.

In the statement, Yale said its 106.3 percent venture capital return is “heavily influenced by large distributions during the internet boom”.

“Since such a calculation assumes reinvestment of proceeds from the portfolio during the period at the same rate of return for the rest of the period, it is inappropriate to compound the 106.3 percent return over the 20-year time horizon.”

The endowment’s venture capital portfolio’s 20-year time-weighted return is 25.5 percent, it said.  

Yale is one of several endowments that have posted their investment returns in the last few weeks. Duke University, Princeton University, Brown University, Stanford Management Company, and Boston College, among others, have also released their results. Those endowments did not break down their investment performance by asset class.

Last month Harvard Management Company, which oversees the university’s $37.1 billion endowment, said it was disappointed by its 8.1 percent annual return, despite a “strong” performance in private equity.