Qubit: Dartmouth Endowment Returns 2022
Dartmouth's endowment returned -3.1% for FY 2022. It paid out $336 million to the school covering 33% of its operating budget.
The 10-year return for the private equity and venture capital portfolio is 23.0%, outperforming all other asset classes. Keep in mind that the PE/VC portfolio is 41% of the endowment.
The donors at Dartmouth are generous. Without their gifts in the last 25 years, the $8.1 billion endowment would be $2.8 billion smaller. The more they give, and the sooner they give, the more it can compound.
“Against that market backdrop, Dartmouth’s endowment returned -3.1% for FY 2022, demonstrating the capital protection benefit of broad asset class diversification and risk management strategies as well as excess returns generated by many of our investment managers. Dartmouth remains prepared for investment volatility, and on the heels of an extraordinary FY 2021 investment return of +46.5%, a slightly negative return in FY 2022 was well within our expectations. The endowment’s investment strategy and implementation, combined with a thoughtfully designed spending formula, are key to the institution’s overall financial risk management framework. Despite volatility in the investment markets, the endowment distributed $336 million in support of Dartmouth’s mission during FY 2022; this represented one-third of the total operating budget and supports Dartmouth’s solid financial positioning.”
“Over the past three, five, and ten years, the endowment generated returns of 15.1%, 13.0%, and 11.8%, respectively, as of June 30, 2022, which places Dartmouth in the top decile of college and university peers.”
“For the 10 years ending June 30, 2022, Dartmouth’s endowment generated an annualized return of 11.8%, outperforming the 8.8% return of MSCI ACWI and the 6.0% return of a general 60 percent equity/40 percent bond benchmark over the same period. Over intermediate- and long-term periods (trailing three, five, 10, and 20 years), Dartmouth’s endowment performance continues to rank in the top decile of the Cambridge Associates (‘CA’) College & University universe. Over the past 20 years, Dartmouth’s endowment has generated an annualized return of 10.0% and has succeeded in meeting its primary objective of generating investment returns in excess of the spending distribution rate plus inflation.”
“For fiscal year 2022, the pattern of performance varied across asset classes—however the private asset classes (venture capital, private equity and real assets) all generated positive investment returns. Venture Capital delivered a strong result despite a pullback in public equity markets and a slowing of IPO activity. Dartmouth’s venture capital managers remain focused on backing innovation and continue to demonstrate a superior ability to identify emerging themes, technologies, and business models and to add value through their time, expertise, and capital investment.
Evidenced by solid absolute and relative returns, outcomes in Private Equity portfolio were driven by the experienced and skilled private equity teams who add fundamental value to their companies, including keen fiscal management and capital protection through times of uncertainty.”
Source:
Dartmouth College, Investment Office - Endowment Report 2022
Dartmouth Announces Endowment Return
College endowment returned -3.1% for fiscal year 2022
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