By Donald Gilpin

Princeton University reported last week that its endowment grew to $26.6 billion in the fiscal year ended June 30, 2020, with an investment gain of 5.6 percent.   

This year’s results, certified by the Princeton University Investment Co. (PRINCO) on October 15, put Princeton in the middle of the pack of Ivy League schools for the year’s investment results. Brown University had the highest percentage return for 2020 at 12.1 percent, with Dartmouth second at 7.6 percent, Harvard third at 7.3 percent, Yale fourth at 6.8 percent, and Princeton fifth.

Over the past ten years the average annual return for the Princeton University endowment has been 10.6 percent, placing it in the top one percent of the 43 colleges and universities listed by Wilshire Trust Universe Comparison Service, according to Princeton University’s October 26 press release. 

Princeton’s $26.6B endowment is the third largest in the Ivy League, behind Harvard at $41.9B and Yale at $31.2B. The Princeton endowment gained 6.2 percent for the 2019 fiscal year and 14.2 percent in 2018.

Princeton University, which cut tuition by 10 percent this year in the face of the COVID-19 pandemic with most students off campus, relies on its endowment to fund more than 60 percent of its budget.

“Princeton has been fortunate to face the many financial challenges created by the COVID-19 pandemic from a strong budgetary position, thanks in part to an endowment that is the result of generations of generosity from alumni and friends, as well as effective stewardship and investments by the trustees and PRINCO,” said University Provost Deborah Prentice.

The endowment supports Princeton University’s financial aid program, which allows students from all backgrounds to attend the University without incurring debt. In April Princeton’s trustees reaffirmed the University’s commitment to affordability, increasing financial aid allocations in response to economic difficulties caused by the pandemic.

The University press release goes on to state that the endowment has helped to ensure during the pandemic that the University can continue to invest in “financial aid to meet the rising needs of students; tools and infrastructure to support online teaching; and a robust COVID testing program to help protect the health of the campus and broader communities.”

According to the PRINCO website, the asset allocation for Princeton University’s investments is 30 percent in private equity, 24 percent in independent return (mostly hedge funds), 18 percent in real assets, 13 percent in developed markets, 9 percent in emerging markets, and 6 percent in fixed income and cash.