Key Takeaways
- • Endowments reporting so far in FY 2026 posted an average return of 26.3%, more than double last year's 11.9% average, according to PitchBook's university endowment return tracker covering the 50 largest US endowments.
- • UNC Investment Fund produced the highest reported return at 37.8%, with half of that growth driven by early venture investments in funds that backed SpaceX.
- • Harvard expects roughly $300 million a year in tax under the One Big Beautiful Bill Act, with its tax liability rising to $1.9 billion at the end of FY 2026 from $317.4 million a year earlier.
- • The tax on investment income for the largest endowments rises from 1.4% to 8% in FY 2027, and MIT, Penn and Vanderbilt have booked FY 2026 liabilities of $1.04 billion, $366.6 million and $121.1 million respectively.
- • Commonfund's Tim Yates cautions that one-year returns are heavily concentrated in a few companies and can be distorted by quarter-end marks and lagging private valuations.
Summary
The largest US university endowments are reporting their strongest returns since 2021, driven largely by early exposure to SpaceX and other AI-linked companies. According to data compiled for PitchBook's university endowment return tracker, which covers the 50 largest US endowments, the endowments reported so far posted an average return of 26.3%, more than double the 11.9% average of last year. Returns have risen steadily since near-record lows in FY 2022 and 2023, which PitchBook describes as the worst period for endowment performance in a decade.
The UNC Investment Fund, which manages the University of North Carolina system's endowment, posted the highest return reported so far at 37.8%. Stefan Strein, president of UNC Management Company, told its board of trustees in September that half of this growth came from early investments in venture capital funds that backed SpaceX, a position first established 17 years ago. Washington University in St. Louis, Harvard and Stanford also benefited from their SpaceX exposure. The private aerospace company's $1.76 trillion IPO in June, combined with strong public equity gains, locked in large one-year gains.
Tim Yates, president and CEO of Commonfund's outsourced CIO business, which manages over $20 billion for nonprofits, foundations, charities and healthcare systems, said venture success this year has been concentrated in a handful of companies. Yates also cautioned against overweighting one-year figures, noting that two identical portfolios can report very different returns depending on quarter-end marks and how far private valuations lag.
Despite the strong year, PitchBook notes endowments are not out of the woods. Harvard, Yale and other large endowments hold upwards of 40% of their portfolios in private equity, an asset class that continues to struggle to return capital to LPs. Tax increases under the One Big Beautiful Bill Act, signed in 2025, will raise the tax rate on investment income for the largest endowments from 1.4% to 8% in FY 2027. Harvard expects to pay roughly $300 million annually and reported a tax liability of $1.9 billion at the end of FY 2026, up from $317.4 million a year earlier. MIT, Penn and Vanderbilt have booked FY 2026 liabilities of $1.04 billion, $366.6 million and $121.1 million, respectively.
In his annual letter, Harvard Management Company CEO N.P. "Narv" Narvekar wrote that the tax will redirect a meaningful share of investment gains that would otherwise support teaching, research, financial aid and donor-designated purposes. He added that more will be required of the endowment to sustain the same level of support, heightening the importance of protecting purchasing power and maintaining sufficient liquidity.
The UNC Investment Fund, which manages the University of North Carolina system's endowment, posted the highest return reported so far at 37.8%. Stefan Strein, president of UNC Management Company, told its board of trustees in September that half of this growth came from early investments in venture capital funds that backed SpaceX, a position first established 17 years ago. Washington University in St. Louis, Harvard and Stanford also benefited from their SpaceX exposure. The private aerospace company's $1.76 trillion IPO in June, combined with strong public equity gains, locked in large one-year gains.
Tim Yates, president and CEO of Commonfund's outsourced CIO business, which manages over $20 billion for nonprofits, foundations, charities and healthcare systems, said venture success this year has been concentrated in a handful of companies. Yates also cautioned against overweighting one-year figures, noting that two identical portfolios can report very different returns depending on quarter-end marks and how far private valuations lag.
Despite the strong year, PitchBook notes endowments are not out of the woods. Harvard, Yale and other large endowments hold upwards of 40% of their portfolios in private equity, an asset class that continues to struggle to return capital to LPs. Tax increases under the One Big Beautiful Bill Act, signed in 2025, will raise the tax rate on investment income for the largest endowments from 1.4% to 8% in FY 2027. Harvard expects to pay roughly $300 million annually and reported a tax liability of $1.9 billion at the end of FY 2026, up from $317.4 million a year earlier. MIT, Penn and Vanderbilt have booked FY 2026 liabilities of $1.04 billion, $366.6 million and $121.1 million, respectively.
In his annual letter, Harvard Management Company CEO N.P. "Narv" Narvekar wrote that the tax will redirect a meaningful share of investment gains that would otherwise support teaching, research, financial aid and donor-designated purposes. He added that more will be required of the endowment to sustain the same level of support, heightening the importance of protecting purchasing power and maintaining sufficient liquidity.
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