University of Houston System's endowment posts -3.1% return for fiscal year

University of Houston System's $1 billion endowment returned -3.1% for the fiscal year ended June 30.

The endowment's return fell short of its benchmark return of -2% for the period, according to a performance report shown in a webcast of the system's Aug. 25 endowment management committee meeting.

Annualized returns for longer periods were not provided in the performance report, and it was not specified whether the returns were gross or net of fees.

The endowment had returned a gross 28.7% for the fiscal year ended June 30, 2021.

For the most recent fiscal year, the negative return reflects a challenging environment for asset owners during the past year.

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 endowment did benefit from significant exposure to private real assets and private equity.

Private real assets was the top performer with a return of 41.6% for the fiscal year ended June 30 (above its 27% benchmark), followed by private equity with a return of 30.5% (compared with its benchmark of 21.6%, which lagged one quarter).

The next top performer was hedge funds with a return of 3.1% (above the -5.4% benchmark), followed by marketable real assets, at -2.6% (6.1%); bonds and cash, -5.4% (-5.2%); and public equities, -23.1% (-15.8%).

As of June 30, the endowment's actual allocation was 38.9% public equities, 37.3% private markets, 14.2% bonds and cash, 6.7% hedge funds and 2.9% real assets.