Rice University endowment ekes out positive return for fiscal year

Rice University's $7.8 billion endowment returned 0.1% for the fiscal year ended June 30.

The endowment's return fell below its policy benchmark of 1.9% for the period, according to a performance report on the website of Rice Management Co., which oversees the Houston-based university's endowment assets.

For the three, five and 10 years ended June 30, the endowment returned an annualized 10.6%, 10.4% and 10.1%, respectively, compared with their respective policy benchmark returns of 10.7%, 10.3% and 8.4%.

The endowment returned 36% for the fiscal year ended June 30, 2021.

The performance report did not disclose whether the returns were gross or net of fees and did not provide returns by asset class.

For the most recent fiscal year, the university's return was one of only nine positive returns among the 46 university endowment returns tracked by Pensions & Investments for the fiscal year ended June 30. The median return among endowments tracked as of Wednesday was -4.1%.

That negative median return reflected a challenging market environment for endowments, primarily in public equities and fixed income. For the year ended June 30, the Russell 3000 index and Bloomberg U.S. Aggregate Bond index returned -13.9% and -10.3%, respectively, in sharp contrast to returns of 44.2% and 4.6% for the year ended June 30, 2021.

Rice's endowment likely benefited from a lower combined allocation to public equities and fixed income totaling only 29% of assets.

As of June 30, the endowment's actual allocation was 25% venture capital and private equity, 21% public equities, 14% real estate, 12% credit/distressed-opportunistic, 10% each absolute return and natural resources, and 8% fixed income and cash.