Key Takeaways
- • Stanford University's Merged Pool returned 4.4% net of all costs and fees for the fiscal year ending June 30, 2023, trailing the 6.9% median return for U.S. college and university endowments, per Cambridge Associates' preliminary data.
- • A typical 70/30 passive portfolio of global stocks and high-quality U.S. bonds returned 10.9% over the same period, outperforming Stanford's pool by roughly 6.5 percentage points.
- • The Merged Pool was valued at $40.9 billion as of June 30, 2023, while the endowment stood at $36.5 billion as of August 31, 2023.
- • Over longer horizons, Stanford's five- and 10-year net annualized returns of 9.5% and 9.4% exceeded the college endowment medians of 8.0% and 7.6%, and the 70/30 benchmark's 5.8% and 6.6%.
- • The endowment disbursed $1.7 billion in fiscal 2023, funding over 22% of operating expenses, with $1.8 billion budgeted for fiscal 2024.
Summary
Stanford University reported a 4.4% investment return for its Merged Pool for the year ending June 30, 2023, net of all external and internal costs and fees, according to the university's announcement. The Merged Pool is the principal investment vehicle for the university's endowment. The result trailed the 6.9% median return for U.S. college and university endowments, as preliminarily reported by Cambridge Associates, and a typical 70/30 passive portfolio of global stocks and high-quality U.S. bonds, which returned 10.9% over the same period.
Stanford Management Company chief executive Robert Wallace attributed the shortfall to losses in the venture capital and growth equity portfolios, which continued a correction that began in 2022. He said strong results in most other asset classes during the past year were partially offset by those losses. Wallace added that, viewed over multiple years, the firm's diversified approach has delivered attractive returns with moderate volatility.
Over longer periods, Stanford's performance compares more favorably. The Merged Pool's five- and 10-year net annualized returns were 9.5% and 9.4%, versus median college and university endowment returns of 8.0% and 7.6%, and 5.8% and 6.6% for the 70/30 passive portfolio over the same spans. The Merged Pool was valued at $40.9 billion as of June 30, 2023, and also includes capital reserves of Stanford Health Care and Stanford Medicine Children's Health along with other long-term funds.
The broader endowment, which includes roughly 75% of the Merged Pool plus assets such as real estate, was valued at $36.5 billion on August 31, 2023, the close of the fiscal year. In fiscal 2023 the endowment disbursed $1.7 billion for academic programs and financial aid, funding more than 22% of the university's operating expenses. The fiscal 2024 payout is budgeted at $1.8 billion. The endowment includes more than 7,900 donor-established funds supporting scholarships, professorships, fellowships and research. Stanford Management Company invests these assets in accordance with its Ethical Investment Framework.
Stanford Management Company chief executive Robert Wallace attributed the shortfall to losses in the venture capital and growth equity portfolios, which continued a correction that began in 2022. He said strong results in most other asset classes during the past year were partially offset by those losses. Wallace added that, viewed over multiple years, the firm's diversified approach has delivered attractive returns with moderate volatility.
Over longer periods, Stanford's performance compares more favorably. The Merged Pool's five- and 10-year net annualized returns were 9.5% and 9.4%, versus median college and university endowment returns of 8.0% and 7.6%, and 5.8% and 6.6% for the 70/30 passive portfolio over the same spans. The Merged Pool was valued at $40.9 billion as of June 30, 2023, and also includes capital reserves of Stanford Health Care and Stanford Medicine Children's Health along with other long-term funds.
The broader endowment, which includes roughly 75% of the Merged Pool plus assets such as real estate, was valued at $36.5 billion on August 31, 2023, the close of the fiscal year. In fiscal 2023 the endowment disbursed $1.7 billion for academic programs and financial aid, funding more than 22% of the university's operating expenses. The fiscal 2024 payout is budgeted at $1.8 billion. The endowment includes more than 7,900 donor-established funds supporting scholarships, professorships, fellowships and research. Stanford Management Company invests these assets in accordance with its Ethical Investment Framework.
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