princeton endowment returns lag behind peers due to venture capital exposure

Princeton University's endowment had a disappointing return of 3.9 percent for the fiscal year ending June 30, 2024, which was lower than its Ivy League peers.

Underperformance and Factors

The university's underperformance was attributed to an overallocation to venture capital and emerging markets, as well as insufficient exposure to the technology sector. The S&P Information Technology sector experienced significant growth, while Princeton's endowment strategy did not capitalize on this. The university's heavy reliance on venture capital and its allocation to emerging markets equities also proved detrimental. Additionally, Princeton faced challenges from declining real estate values and rising interest rates.

Impact on Financial Aid

The university's endowment also experienced a decline in donations, which could impact its ability to provide financial aid to students.

Resilience and Future Plans

Despite these setbacks, Princeton's endowment has shown resilience over the long term. The university's investment strategies and financial decisions will be closely monitored as it seeks to improve its performance and secure its financial future.

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