This study is based on a survey that Cambridge Associates (CA) administers annually to our college and university clients. The report that follows summarizes returns, asset allocation, and other investment-related data for 164 institutions for the fiscal year ended June 30, 2019. Included in this year’s report are commentary and exhibits spread across six separate sections.

Investment Portfolio Returns highlights performance results for select trailing periods. Larger endowments generally performed better than their smaller counterparts in fiscal year 2019 and over the last decade. This section investigates some of the factors that contributed to the variation of peer returns and what made top performers stand out. Also included in this section are insights into which expenses endowments deduct in their net return calculation.

Performance results of peers can be informative, but they are not necessarily the most effective benchmark for evaluating an endowment’s investment performance. Many endowments that underperformed the peer median in this study fared well when evaluated against their policy portfolio benchmark. A new section to this year’s report summarizes this and other topics that pertain to Investment Policy.

Portfolio Asset Allocation looks back at changes over the last decade and incorporates data on target asset allocations to provide insight into how institutions are altering their portfolios heading into the future. After considering these observations and trends in uncalled capital commitments, it is evident that endowments are generally increasing their portfolio exposure to private equities.

The number of managers that endowments use for their overall portfolio and within specific asset classes can vary widely. Investment Manager Structures explores data on this topic, as well as implementation strategies for traditional assets (i.e., active versus passive management) and alternative assets.

Payout from the long-term investment portfolio contains a set of analyses that look at portfolio inflows and outflows. Included in this section are exhibits on spending policies, the long-term investment portfolio’s support of college and university operating budgets, and liquidity coverage ratios. This section also looks at how target spending rates for market value–based spending rules have changed over the last decade.

Finally, Investment Office Staffing and Governance takes a look at topics such as the number of personnel in the investment office and investment committee structure. Also included are analyses on how endowments use outside advisors/consultants and who has decision rights for asset allocation policy development and manager selection.