Investment Performance

The University of Chicago’s endowment finished fiscal year 2016 with a market value of $7 billion, including $873 million of Medical Center endowment and $76 million of Marine Biological Laboratory endowment. Ninety-six percent of the endowment is invested in the Total Return Investment Pool (TRIP). TRIP’s return for the fiscal year, net of outside management fees, was –1.9 percent, which generated a $175 million loss for the endowment. The average compounded investment result for the University over the last five years is a 5.7 percent gain; the average since the financial crisis[1] is a 9.5 percent gain; the average over the last 10 years is a 6.3 percent gain; and the average return over the past 20 years is 9.6 percent. TRIP’s return has outperformed the market-based, policy-weighted strategic benchmark used by the University over the long term.

Over the same time periods, TRIP returns have been favorable compared with the Cambridge Associates universe of colleges and universities median returns, even as the University has implemented a lower risk profile than most peers (see figure 1). The University and its trustees have selected an endowment strategy that is consistent with its total enterprise, long range planning strategy in pursuit of academic eminence.

World markets experienced an underwhelming year in fiscal year 2016 led by weakness in the global public equities and commodities markets. Despite the challenging environment, the endowment has produced near double-digit returns since the financial crisis in 2008 and 2009. The investment returns earned by TRIP have added $4 billion in value to the endowment since the financial crisis and have funded $3 billion in payouts to the University and its affiliates in the same period. Over the past two decades, the endowment has grown from $2 billion to its current level of $7 billion and has been boosted by solid investment returns, generous alumni support, and prudent spending (see figure 2). TRIP’s results reflect positive returns from equities, private markets, and bonds, together with strong performance by the University’s investment managers.

[1] March 31, 2009, through June 30, 2016, annualized