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The Story: This year, Ivy League university endowments are seeing their worst returns of the past decade.

According to PitchBook data, the average performance of an Ivy League school saw a 2.1% return on its investment in fiscal year 2023. Columbia’s endowment performed the best with 4.7% returns and Princeton’s performed the worst with -1.7%.

For reference, the average performance of an Ivy League school over the last ten years is 11.1%.

Endowment fund returns reflect the declines seen across private markets, and the reasons for both seem to be the same—high interest rates, a valuation correction after 2021, and general economic uncertainty. And these adversities don’t show signs of reversing soon. Ivy League institutions are doubtful to begin seeing significant returns on their investments again in the near future.

In an interview with PitchBook’s Jessica Hamlin, Matt Bank, deputy chief investment officer at Global Endowment Management, says that “there's a scenario whereby [public] markets start to recover over the next 18-24 months, though it seems unlikely to me that private investments, particularly in VC, will drive portfolio returns.”

As 2024 approaches, endowment returns will also depend on how well public markets perform, as these endowments typically allocate about 20% of their capital to public investments.

Pitchbook’s Hamlin believes that “if the PE and VC dealmaking and exit environments don't improve in 2024 and public market volatility persists, endowment returns could remain paltry for the foreseeable future.”

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