Trainee journalist Green

Harvard, one of the top cattle schools in the world, makes history.

According to the 2021 fiscal year report released by Harvard Management Company. By the end of June 2021, the total assets of the Harvard Endowment Fund exceeded 50 billion US dollars, reaching 53.2 billion US dollars, which is equivalent to a medium-sized public offering fund in China. Compared with 41.9 billion yuan at the end of the previous fiscal year, it has increased by more than 10 billion US dollars.

Harvard has made history, and the endowment fund for colleges and universities has exceeded 50 billion yuan for the first time.

The expansion benefited from the excellent performance of the Fund in fiscal year 2021. The return of the fund in 2021 is as high as 33.6%. The Fujita endowment fund goes beyond it. But given the size of the Harvard endowment, which ranks first in the world, this performance is commendable.

The school was overjoyed and announced an increase in expenditure.

From a split point of view, the performance of the equity assets fund made the greatest contribution in fiscal year 2021.

According to Harvard, equity assets account for 14 per cent of the portfolio, with a return of 50 per cent in fiscal 2021. The most striking are private equity assets, with a return of 77% over the same period. Hedge funds returned 16% in 2021. At present, hedge funds and private equity are the two types of assets with the highest proportion of portfolios.

Source: Harvard official website

It can be seen that the Harvard Endowment Fund is determined to embrace "alternative" investment. This style, pioneered by legendary investor David Swenson, is affecting more and more endowments.

Today, Harvard has fought a beautiful turnaround.

What many people may not know is that just four or five years ago, the Harvard Endowment was in a precarious situation. Because of the poor performance of his tenure, the then CEO of Harvard Management Company announced that he was on sick leave after only a year and a half. After two months of sick leave, he left the Harvard Endowment Fund. He is not alone. For the previous 11 years, the Harvard Endowment was a backward student in the endowment of prestigious universities. The performance is not good, the CEO pressure is great, the personnel flows frequently.

The CEO position at the Harvard Endowment Fund is not easy.

Four or five years ago, headhunters told Institutional investors that the Harvard Endowment was being watched all the time. If you don't perform well, you will be blamed by countless people. It's kind of like the coach of a well-known team. Everyone in the circle knows you. Once you lose the game, everyone yells at you.

Headhunters poached CEO Narv Narvekar from Columbia University Endowment Fund for Harvard in 2016. Narv Narvekar is called the "can't be wrong" candidate. Narvekar also lived up to expectations. He not only brought followers from his former employer, but also pushed forward the reform as soon as he took office. Narvekar pushed ahead with a five-year plan. The plan is to revolutionize the face of the Harvard Endowment Fund within five years. These reforms mainly include the following five items.

(1) reduce exposure to natural resources; (2) reduce exposure to real estate; (3) increase exposure to private equity; (4) reduce exposure to assets in public market equity; and (5) increase exposure to hedge funds, especially those with low relevance to the stock market.

The Harvard Endowment Fund said in its financial report that the reform has been basically completed. The goal of the five-year plan was achieved ahead of schedule.

On the one hand, the direction of these reforms is determined by the endowment fund's judgment on the medium-and long-term performance of various types of assets, and on the other hand, it is considered to increase the proportion of private equity and venture capital. In this way, the proportion of high-yielding private equity and venture capital has been increased while maintaining the risk borne by the portfolio as a whole.

This coincides with the Yale Endowment Fund.

According to the 2020 financial report of the Yale Endowment Fund, only 2.3% of the Yale endowment fund invests in the US domestic equity portfolio and 11.4% invests in equity assets outside the United States, a combined 13.7% of the two. The proportion of venture capital assets is as high as 22.6%, which is the asset class with the highest proportion of portfolio.

Source: Yale Endowment Fund Annual report

Yale Endowment Fund returns 40.2% in fiscal year 2021

Zhang Lei, founder of China's top investment institution Hillhouse Group, once worked for the Yale Endowment Fund, which invested some seed money when Zhang Lei founded Hillhouse. In addition, Yale is also Zhang Lei's alma mater.

The Yale endowment lost legendary investor David Swenson last year.

Matt Mendelsohn, the new chief investment officer, took over. The Yale endowment fund returned 40.2% after fees in 2021 and handed in a good answer. In terms of asset appreciation, the assets of the Yale Endowment Fund increased by $12.1 billion in fiscal year 2021. By the end of 2021, the endowment fund had reached US $42.3 billion. The Yale Endowment Fund is one of the most important sources of income for Harvard. In fiscal year 2021, the endowment fund spent $1.5 billion, accounting for 1/3 of the current Yale budget.

In the long run, the Yale endowment fund has earned an average annualized income of 12.4% over the past decade. The average annualized return of the fund over the past 20 years is 11.3%. In the university endowment fund, the performance is among the best in both 10-year and 20-year periods.

Over the past 20 years, the assets of the Yale endowment have grown from $10.7 billion to $42.3 billion, not counting the $19.5 billion spent by the university.

An important expenditure of the Yale Endowment Fund is student financial assistance. In announcing the results of the endowment fund, Yale University pointed out that in the 2020-2021 academic year, 61 per cent of Yale undergraduates received financial aid, with an average of US $58000 per student (converted into cash for tuition fee remission and other grants). That is, 30-400000 yuan.

Last year, the winner of the Fujita endowment fund, Brown University, stood out again.

Last year's champion Brown did well again. The Brown University Endowment Fund has earned more than 50% this year. It is a leader in the vine school endowment fund that has been announced so far. Although Brown's endowment is small, it has grown significantly after two years of outstanding performance. Today, what American rattan schools want to know is what is the secret weapon of the Brown University Endowment Fund. In addition to Brown, MIT's earnings in the latest fiscal year of prestigious schools reached 55.5%, which is also very outstanding.

The endowment funds of famous universities compete with each other, and the endowment funds of colleges and universities push through the old and bring forth the new, constantly looking for new sources of long-term income, which also promotes the development of the asset management industry, especially the asset allocation.

I wonder if such a proud rattan school will consider increasing the scholarship for international students.