Tulane University endowment chalks up 6.2% return for fiscal year

Tulane University's $1.6 billion pooled endowment returned a net 6.2% for the fiscal year ended June 30.

The return exceeded its static benchmark return of -0.8%, according to an annual report posted on the New Orleans-based university endowment's website.

For the three, five and 10 years ended June 30, the endowment returned an annualized net 14%, 11.6% and 10.6%, respectively, above their respective benchmarks of 9.3%, 8.6% and 8%.

The endowment returned a net 35.8% for the fiscal year ended June 30, 2021.

For the most recent fiscal year, the pooled endowment was the top performer among the 50 university endowments tracked by Pensions & Investments as of Tuesday.

As one of only 10 tracked endowments that posted a positive return, Tulane's endowment managed to navigate successfully through a challenging market environment, particularly 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.

The median return among endowments tracked by P&I was -4.2% for the year ended June 30, 2022.

In the annual report, Chief Investment Officer Richard Chau cited the endowment's private capital and marketable alternatives portfolios for the outperformance.

"The private capital portfolio continues to generate a significant illiquidity premium that will be a driver of endowment performance for years to come," Mr. Chau wrote. "With marketable alternatives, our commitment and patience finally paid off as our managers were able to capitalize on idiosyncratic opportunities throughout the year."

Private capital and marketable alternatives posted net returns of 27.2% and 0.3%, respectively, for the fiscal year ended June 30, while core fixed income returned a net -4% and global equity returned a net -16.4%.

The pooled endowment's target allocation is 32.5% global equity, 30% private capital, 27.5% marketable alternatives, 9% core fixed income and 1% cash.