FIN News: How Private Markets Helped Large University Endowments Achieve Double-Digit Growth
Anne Duggan, CAIA
Managing Director, Client CIO Group
FIN News recently covered TIFF Investment Management’s article, “FY25 Performance Drivers: Insights from the Biggest University Endowments.” The paper’s author, Anne Duggan, Managing Director, Client CIO Group, shared with FIN News that as the performance difference between public and private markets has narrowed, private markets are now proving to be a major driver of performance for university endowments.
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These materials may contain forward-looking statements relating to future events. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of such terms or other comparable terminology. Although TIFF believes the expectations reflected in the forward-looking statements are reasonable, future results cannot be guaranteed.
Chief Investment Officer: Contributing Factors to Strong University Endowments Returns in 2025
Anne Duggan, CAIA
Managing Director, Client CIO Group
Chief Investment Officer recently interviewed TIFF Managing Director, Client CIO Group, Anne Duggan, for a piece discussing her research on university endowment performance in FY25. She shared her expertise, adding that “this year was unique, in that both risk and safety net assets had solid positive performance.”
The materials are being provided for informational purposes only and constitute neither an offer to sell nor a solicitation of an offer to buy securities. These materials also do not constitute an offer or advertisement of TIFF’s investment advisory services or investment, legal or tax advice. Opinions expressed herein are those of TIFF and are not a recommendation to buy or sell any securities.
These materials may contain forward-looking statements relating to future events. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of such terms or other comparable terminology. Although TIFF believes the expectations reflected in the forward-looking statements are reasonable, future results cannot be guaranteed.
Pensions & Investments: How AI Drove University Endowments Higher in FY25
Anne Duggan, CAIA
Managing Director, Client CIO Group
Pensions & Investments recently interviewed TIFF Managing Director, Client CIO Group, Anne Duggan, for a piece discussing university endowment performance in FY25. Duggan shared her analysis that, as the spread between public and private markets has begun to narrow, endowments with private exposure have seen positive returns.
Disclaimer: To access this article, a subscription is necessary. Please note that TIFF does not possess the rights to distribute this content.
The materials are being provided for informational purposes only and constitute neither an offer to sell nor a solicitation of an offer to buy securities. These materials also do not constitute an offer or advertisement of TIFF’s investment advisory services or investment, legal or tax advice. Opinions expressed herein are those of TIFF and are not a recommendation to buy or sell any securities.
These materials may contain forward-looking statements relating to future events. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of such terms or other comparable terminology. Although TIFF believes the expectations reflected in the forward-looking statements are reasonable, future results cannot be guaranteed.
Unpacking the Top-Performing Large University Endowments in FY25
Anne Duggan, CAIA
Managing Director, Client CIO Group
Higher Ed Dive recently covered TIFF’s article, “FY25 Performance Drivers: Insights from the Biggest University Endowments.” Written by Anne Duggan, Managing Director, Client CIO Group, the article analyzes the factors that led large endowments to post double-digit returns in FY25 and suggests that private markets investments served as a major catalyst for the strong performance.
To learn more about the TIFF’s analysis, read the press article here.
The materials are being provided for informational purposes only and constitute neither an offer to sell nor a solicitation of an offer to buy securities. These materials also do not constitute an offer or advertisement of TIFF’s investment advisory services or investment, legal, or tax advice. Opinions expressed herein are those of TIFF and are not a recommendation to buy or sell any securities.
These materials may contain forward-looking statements relating to future events. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of such terms or other comparable terminology. Although TIFF believes the expectations reflected in the forward-looking statements are reasonable, future results cannot be guaranteed.
October is when the biggest university endowments − those with over $1B − share their annual investment results. From these early reports, we can glean what performance drivers we will see, ahead of the full NACUBO-Commonfund Study of Endowments, which comes out in February 2026.
The average return of $1B+ university and college endowments that publicly announce is 11.5% vs. 12.7% for the 65% MSCI ACWI / 35% Bloomberg Agg. This represents the second consecutive year of double-digit gains, following an 11.2% average 1-year performance for all institutions in FY24, per the NACUBO-Commonfund Study of Endowments. However, the trends of what drove performance have shifted in FY25.
FY25 Endowment Returns
Source: Endowment returns as reported by Pensions & Investments, as of October 29, 2025. Represents 40 university and college endowments. 65% MSCI All Country World Index, 35% Bloomberg US Aggregate Bond Index.
What is driving the returns?
A return to long-term trends: top-performing endowments have large private equity allocations. Certain sub-asset classes like growth or pre-IPO private equity outperformed. Broadly, the return spread between the allocations appears to be narrowing with private equity and venture posting high single digit/low double digit returns vs. 15.2% for the S&P 500, a spread of only 300-500bp.
Strong absolute returns in an unusual year where both equities and bonds contributed positive returns. Both risk and diversifying assets performed well, highlighting broad macro and economic concerns despite strong equity returns.
AI continues to drive equity markets. Portfolios with exposure to AI-related themes like Nvidia outperformed.
Return of international performance. FY25 made the case for international diversification in equities, with MSCI ACWI ex US (17.7%) outperforming the S&P 500 (15.2%).
Broad performance in diversifying assets, including gold. Investors looked for and received performance in a swath of uncorrelated asset classes, including gold, hedge funds and traditional fixed income.
Finally, the Endowment Tax is coming. Multiple private universities commented on the forthcoming increase in tax rate in their FY25 annual reports and endowment return press releases. The increase in the Endowment Tax rates goes into effect for taxable years beginning after December 31, 2025. For institutions with a fiscal year end of June 30, this means the new tax rate would apply starting July 1, 2026.
FY25 Asset Class Returns
*As reported State Street Investment Management. Source: State Street.
How did individual endowments do?
When looking at individual returns, the Ivy League and other renowned private endowments returned slightly above the total group. The top three returns came from public universities, with University of Wisconsin-Madison the highest FY25 performer with 16.2%.
FY25 Returns Publicly Announced
Source: Pensions & Investments.
Case study: private allocation of top performers
Looking at top performers’ asset allocation, it’s clear that the two-year trend of large private allocations being a detractor has come to a conclusion. Among the top performers that publicly release their asset allocation, each had approximately one-third or greater invested in private equity. A standout example on the strength in late-stage venture/growth is University of Michigan, which returned 15.5%. University of Michigan states that 28% of its portfolio is in venture capital with an additional 9% in private equity.
FY25 Top Returners Private Allocation
Source: University of Michigan FY 2025 Financial Statement; MIT Report of the Treasurer FY2025; Standford Management Company website, pulled 10/8/25; University of Wisconsin Foundation website, pulled 10/22/25.
The materials are being provided for informational purposes only and constitute neither an offer to sell nor a solicitation of an offer to buy securities. These materials also do not constitute an offer or advertisement of TIFF’s investment advisory services or investment, legal or tax advice. Opinions expressed herein are those of TIFF and are not a recommendation to buy or sell any securities.
These materials may contain forward-looking statements relating to future events. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of such terms or other comparable terminology. Although TIFF believes the expectations reflected in the forward-looking statements are reasonable, future results cannot be guaranteed.
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