October 2, 2019
Stanford releases annual financial results for investment return, endowment
Stanford University today announced two separate annual financial results. The Stanford Management Company reports return on its investment portfolio as of June 30, 2019. The university also reports the value of its endowment as of the close of its fiscal year, Aug. 31, 2019.
For the 12 months ending June 30, 2019, Stanford Management Company generated a 6.5 percent investment return, net of all internal and external costs and fees, but gross of the newly levied tax on certain endowments. The broad universe of U.S. colleges and universities generated a median 4.9 percent return for the same period, according to preliminary data tracked by Cambridge Associates. “We are pleased to report $1.8 billion of investment gains for the year that will help support Stanford’s educational mission, including its commitment to student financial aid. Results were aided by particularly strong performance in private equity, the largest single asset class in the Merged Pool portfolio,” said Robert Wallace, chief executive officer of Stanford Management Company.
For the last five and 10 years, respectively, Stanford generated a 7.4 percent and 10.2 percent annualized net return, versus the 5.1 percent and 8.5 percent annualized median returns for colleges and universities over the same time periods.
Stanford Management Company is the university’s investment office and manages Stanford’s $29.6 billion Merged Pool of total investments. The Merged Pool is the principal fund for investing the university’s endowment and also includes capital reserves of Stanford Health Care and Lucile Packard Children’s Hospital at Stanford, along with other long-term funds. More information is available on the Stanford Management Company’s website.
The value of the university’s endowment itself was $27.7 billion on Aug. 31, 2019, the end of the university’s fiscal year. The endowment disbursed $1.3 billion to support vital academic programs and financial aid during the fiscal year, equal to 4.9 percent of the endowment’s value at the beginning of the fiscal year.
Stanford’s endowment is intended to provide financial support for the university in perpetuity. Payout from the endowment funds approximately 20 percent of the university’s operating budget. Rather than a single fund, the endowment consists of thousands of individual gifts from donors, with most gifts restricted to specific uses.