Yale reports investment return for fiscal 2022
Yale’s endowment earned a 0.8% investment return, net of fees, for the year ending June 30, 2022, earning $266 million in investment gains. After $1.6 billion of spending distributions to the operating budget, the endowment value decreased from $42.3 billion on June 30, 2021 to $41.4 billion on June 30, 2022.
“In such a volatile year for the world’s financial markets, we are pleased to have protected Yale’s capital,” said Matt Mendelsohn, Yale’s chief investment officer. “That said, we expect challenging times ahead as rising interest rates, inflation, and the geopolitical environment provide stiff headwinds.”
The endowment provides crucial support to Yale. It is managed to provide a steady stream of income to the university’s operating budget, while preserving purchasing power for future generations. To meet this goal, the endowment invests with a long time-horizon, and the university balances current spending needs with support for its long-term priorities.
Spending from the endowment is the largest source of revenue for Yale and supports a global need-blind admissions policy, the recent expansion of the student body, an ongoing faculty excellence and diversity initiative, the university’s ambitious sustainability efforts, heavy investment in science and engineering, and many other critical expressions of Yale’s mission. Over the past decade, the university has spent $12.7 billion from the endowment. In the decade before that, total spending amounted to $7.9 billion. Over the past 10 years and 20 years, endowment distributions to the operating budget have increased at annualized rates of 4.7% and 6.9%, respectively. Fiscal 2023 spending is projected to be $1.7 billion, representing 34% of the operating budget.
The endowment is structured to support the university in perpetuity. Yale pursues an investment strategy designed to achieve its goals through the careful consideration of risk and return across asset classes, including public equities, marketable alternatives, leveraged buyouts, venture capital, and real assets, and through the astute selection of external investment managers within those asset classes.
This investment strategy has produced excellent long-term results. Over the decade ending June 30, 2022, Yale’s endowment returned 12.0% per annum, exceeding the mean 10-year return for college and university endowments by an estimated 3.4% per annum. Over the 20 years ending June 30, 2022, Yale’s endowment returned 11.3% per annum, exceeding the mean 20-year return for college and university endowments by an estimated 3.5% per annum.