PROVIDENCE – Brown University’s investment portfolio posted a 12.4% return for the fiscal year that ended June 30, boosting Brown’s endowment to an all-time high of $4.2 billion, the university announced on Friday.
The investment return surpassed both the 5.8% preliminary return of its benchmark portfolio and the Cambridge Associates’ mean and median returns for colleges and universities – 5% and 4.9%, respectively, according to Brown.
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Brown’s investment performance for fiscal 2019 outdid other notable universities, including Harvard University (6.5%), Dartmouth College (7.5%), University of Pennsylvania (6.5%) and the Massachusetts Institute of Technology (8.8%), according to news reports. Many colleges and universities haven’t yet reported their results.
In a news release, Brown said the endowment has posted $2.9 billion in investment gains over the last 10 years, and it has provided $1.6 billion to the university’s educational mission.
“From providing scholarships to undergraduates to funding high-impact research by world-class faculty and graduate students, contributions from the endowment are vital in advancing Brown’s strategic priorities,” Barbara Chernow, executive vice president for finance and administration, said in a statement. “While we are pleased to have achieved a successful return for fiscal year 2019, even more important is our continued focus on the endowment’s long-term mission of sustaining the Brown experience for generations of students to come.”
Brown said the endowment provided $165 million to the university’s operating budget during fiscal year 2019, a contribution that represents approximately $16,000 per student and 14% of Brown’s total operating budget.
The university said the endowment funds a significant portion of the financial aid budget each year, enabling Brown to meet the full demonstrated financial need of all undergraduate students.
For the incoming Class of 2023, 43% of students received need-based aid with an average financial aid package of $51,532, the school said.
Jane Dietze, Brown vice president and chief investment officer, said the investment portfolio has an emphasis on downside risk management, which proved to be valuable in a volatile year for U.S. stock markets. The outperformance against the S&P 500 index occurred primarily when the market was declining last fall, she said.
William Hamilton is PBN managing editor. You can follow him on Twitter @waham or email him at hamilton@pbn.com.
