Key Takeaways
- • Notre Dame's endowment delivered a 57.9% return for the 12 months through June 30, 2000, ranking as the nation's top performer in the university category and transforming the $2.2 billion fund into a $3.5 billion pool of capital.
- • Chief Investment Officer Scott Malpass achieved an annualized return of 18.1% over the preceding decade, significantly outpacing the S&P 500's 17.8% return over the same period, and 29.1% over the prior three years versus the S&P 500's 19.7%.
- • Malpass's aggressive allocation strategy centered on international equities, buyout funds, and venture capital investments, positioning the endowment as an outlier performer after Notre Dame had underperformed for decades prior to his 1992 appointment.
- • The superior endowment returns enabled Notre Dame to implement the lowest tuition increase in 20 years (5%), fund new academic programs including Latino Studies, and more than double scholarship spending.
- • Prior to Malpass's leadership, Notre Dame's endowment averaged only 13% annualized returns over the 10-year period before 1992, establishing a clear performance inflection under his tenure.
Summary
Notre Dame's investment office has emerged as an exceptional performer in university endowment management, delivering results that exceed the university's struggling football program by a substantial margin. For the 12 months ending June 30, 2000, Chief Investment Officer Scott Malpass orchestrated a 57.9% return on the endowment, swelling the fund from $2.2 billion to $3.5 billion. This performance ranked Notre Dame's endowment as the top performer among universities during the period, according to preliminary industry surveys.
The strong 2000 results represent the culmination of a strategic shift initiated when Malpass assumed full control of the endowment in 1992. Over the subsequent eight years through June 30, 2000, the endowment achieved an annualized return of 18.1%, substantially outpacing the S&P 500's 17.8% return. The outperformance becomes more pronounced over shorter horizons: the endowment delivered 29.1% annualized returns over the three years ending June 30, 2000, compared to 19.7% for the S&P 500. This contrasts sharply with the pre-Malpass era, when Notre Dame's endowment averaged only 13% annualized returns during the 10 years prior to 1992.
Malpass's investment philosophy emphasizes aggressive exposure to international stocks, leveraged buyout funds, and venture capital allocations—a departure from more conservative university endowment strategies. When asked about his approach, Malpass articulated the institutional imperative: "For us, the biggest risk is not being able to fulfill the dreams of our faculty and students. So our goal is to do what we need to do to achieve that." This mandate-driven strategy has proven effective in generating resources for institutional priorities.
The tangible benefits of superior endowment performance have extended beyond balance sheet growth. The university limited tuition increases to 5% for the 2000 academic year—the lowest increase in 20 years—while simultaneously funding new academic initiatives including a Latino Studies department and more than doubling scholarship expenditures. These outcomes demonstrate how endowment performance directly translates to expanded institutional capacity and improved student access.
The strong 2000 results represent the culmination of a strategic shift initiated when Malpass assumed full control of the endowment in 1992. Over the subsequent eight years through June 30, 2000, the endowment achieved an annualized return of 18.1%, substantially outpacing the S&P 500's 17.8% return. The outperformance becomes more pronounced over shorter horizons: the endowment delivered 29.1% annualized returns over the three years ending June 30, 2000, compared to 19.7% for the S&P 500. This contrasts sharply with the pre-Malpass era, when Notre Dame's endowment averaged only 13% annualized returns during the 10 years prior to 1992.
Malpass's investment philosophy emphasizes aggressive exposure to international stocks, leveraged buyout funds, and venture capital allocations—a departure from more conservative university endowment strategies. When asked about his approach, Malpass articulated the institutional imperative: "For us, the biggest risk is not being able to fulfill the dreams of our faculty and students. So our goal is to do what we need to do to achieve that." This mandate-driven strategy has proven effective in generating resources for institutional priorities.
The tangible benefits of superior endowment performance have extended beyond balance sheet growth. The university limited tuition increases to 5% for the 2000 academic year—the lowest increase in 20 years—while simultaneously funding new academic initiatives including a Latino Studies department and more than doubling scholarship expenditures. These outcomes demonstrate how endowment performance directly translates to expanded institutional capacity and improved student access.
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