Qubit: UVIMCO Endowment Returns 2022
Private equity returned 3.7% for FY 2022 at the University of Virginia's endowment. Keep in mind that private equity returned 16.0% annually over a 20-year period. It continues to outperform every other asset class.
However, as the endowment payout covers more of the school's operating budget the portfolio is becoming more illiquid.
“In the face of market volatility, UVIMCO’s Long Term Pool declined 4.7% during this fiscal year. However, it outperformed the passive policy portfolio by 8.5%, demonstrating the investment acumen of the UVIMCO team and external managers. The returns of our investment strategies fluctuate from year to year. The strategies that did well last year—Public Equity, Private Equity, and Long/Short Equity—significantly underperformed this year and were offset by gains in Real Assets and Absolute Return. Our resources portfolio, buoyed by appreciating energy prices, served as an important diversifier for the Long Term Pool.
The success of UVIMCO’s portfolio is best viewed through a long-term lens and against key benchmarks (Table 1). Over the past two decades, we have secured double-digit returns for our investors. Our twenty-year annualized return of 10.4% is well in excess of the 8.0% return required to preserve the purchasing power of the endowment. Public Equity generated an annualized return of 12.6%. Long/Short Equity generated an annualized return of 7.4%. Private Equity generated an annualized return of 16.0%. Real Assets generated an annualized return of 12.2%. Absolute Return generated an annualized return of 4.9%. Credit and Fixed Income generated annualized returns of 8.5% and 4.0%, respectively.”
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