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Public pensions are facing challenges as real estate investments have underperformed, mirroring issues seen in venture capital for endowments. Many state plans, particularly in Connecticut, New Jersey, Washington, and Arizona, have struggled to meet benchmarks due to high real estate exposure, prompting a reevaluation of strategies. As private real estate continues to decline, pensions are shifting focus towards sectors with stronger fundamentals, such as industrial and multifamily properties, while moving away from distressed office and retail assets.
Harvard's $53.2 billion endowment achieved a 9.6% return in fiscal year 2024, driven by strategic manager selection and significant shifts in asset allocation. The endowment reduced real estate and natural resources exposure while increasing private equity and hedge fund allocations, with technology stocks contributing to the strong performance. Despite private equity underperforming relative to public markets, the overall results positioned Harvard favorably among Ivy League peers.
Columbia University’s endowment achieved an 11.5% return for the fiscal year ending June 30, growing its value to $14.8 billion, driven by strong public markets and positive private asset performance. While private assets lagged, the endowment's domestic equity exposure was notably high, contributing to its success compared to peers. Columbia outperformed Dartmouth and several other universities but fell short of the University of Minnesota Foundation's 13.4% return.
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