Qubit: Brown Endowment Returns 2022
Brown's endowment returned -4.6% for FY 2022. It paid out $208 million to the school covering 16% of its operating budget. A third of that payout goes to scholarships.
Over the last 10 years the endowment generated $4.8 billion in investment gains.
After the previous two spectacular years, the endowment's venture portfolio generated a small loss. But some of their hedge funds invested heavily in tech (likely public and late-stage private) and underperformed, losing $220 million in their absolute return portfolio.
“For the fiscal year ending June 30, 2022, the Brown University endowment and other managed assets declined in value by $315 million, an investment return of -4.6%. The endowment contributed $208 million to the University operating budget and benefited from gifts of $133 million. As a result, at the conclusion of Fiscal Year 2022, the endowment and other managed assets totaled $6.5 billion.”
“The Venture Capital portfolio generated modest losses in Fiscal Year 2022 after spectacular gains in the prior two years. The shares of businesses that Brown owns through Venture Capital strategies tend to be young, fast-growing technology companies that, admittedly, were at the nexus of the aforementioned speculation. Reductions in valuations for private technology-driven companies have not yet fully reflected the declines of publicly listed peers. Brown’s investment managers, however, tend to use more conservative valuation methodologies than the industry overall. So while additional headwinds are likely, they will not be as severe as those observed in the most highly-valued public and private companies.”
“Regrettably, in Fiscal Year 2022, Brown’s Absolute Return portfolio failed to deliver this foundational benefit of low correlation, resulting in losses of $220 million, or -12.2%. In particular, while some of Brown’s investment managers delivered excellent results, others’ portfolios grew over the course of the market cycle to bear excessive correlation not only to each other but also increasingly to Brown’s Venture Capital portfolio.”
Source:
Brown Investment Office - Endowment Report 2022
Brown endowment falls to $6.5 billion after -4.6% return on investment
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