Harvard Endowment Jumps to $53.2 Billion, Delivers 9.6% Returns in 2024 | News

The worth of Harvard’s endowment grew to $53.2 billion after the Harvard Administration Firm boasted a 9.6 % return on its investments in fiscal yr 2024 — the primary yr the endowment has elevated in worth since 2021.

The HMC’s sturdy funding returns — that are considerably increased than final yr’s 2.9 % returns — allowed the worth of the endowment to extend by $2.5 billion from fiscal yr 2023, the College introduced on Thursday in its annual monetary report.

The expansion comes whilst Harvard has contended with a big drop in endowment presents amid the continued backlash to the College’s dealing with of campus antisemitism.

This improve within the endowment worth comes after two consecutive years of endowment drops, falling to $50.9 billion in FY 2022 and $50.7 billion in FY 2023. This reversal represents a return to the upward pattern in Harvard’s endowment worth over the previous twenty years.

HMC CEO N.P. “Narv” Narvekar wrote within the monetary report that Harvard’s endowed funds has a goal return of 8 %, and the annualized return of 9.3 % averaged over the previous seven years has “greater than saved tempo” with that concentrate on.

Although some critics have mentioned Harvard’s endowment has underperformed in recent times, with an funding return of 9.6 % this yr, Harvard is third solely to Brown and Columbia amongst its Ivy League+ friends, which delivered 11.3 % and 11.5 % returns, respectively.

Endowment distributions in fiscal yr 2024 totaled $2.4 billion — 37 % of the College’s annual income — with funds going towards prices resembling monetary support, school, analysis initiatives, and extra. The contributions have allowed the College to commit $749 million in monetary support throughout the College, with $250 million supplied to undergraduates, in response to the report.

The biggest allocations inside Harvard’s endowment are to personal fairness and hedge funds, with non-public fairness accounting for 39 % of the portfolio and hedge funds accounting for 32 %.

Harvard solely allocates 14 % of its endowment in direction of public equities attributable to its decrease danger tolerance. Fiscal yr 2024 was a powerful yr for public equities — with the S&P 500 usually setting new file highs — however the HMC nonetheless delivered sturdy returns given its decrease publicity to public equities.

“In FY24, public fairness and hedge fund portfolios stood out for his or her sturdy efficiency,” Narvekar wrote within the report. “It is a notably constructive indicator, since HMC’s hedge fund portfolio has much less fairness publicity than most hedge fund indices, but nonetheless outperformed throughout a powerful yr for equities.”

Harvard additionally lowered the endowment’s publicity to actual property and pure assets from 25 % in 2018, to only 6 % in FY 2024. This discount has helped drive a constructive impression on the endowment returns, in response to Narvekar.

The College noticed a price range surplus of $45 million in 2024, a big change in comparison with the excess of $186 million that Harvard operated with in FY 2023. Income progress of 6 % was outpaced by the expense progress of 9 %.

Vice President and Chief Monetary Officer Ritu Kalra attributed the rise in bills to HMC investing in its folks.

“Our dedication to attracting and retaining prime expertise by way of aggressive salaries accounted for simply over half of the rise in compensation,” Kalra wrote.

Harvard President Alan M. Garber ’76 acknowledged the challenges dealing with the College in a message printed within the annual report.

“The work forward calls for a lot of every of us,” Garber wrote. “Luckily, we’re folks supported by beneficiant bodily and monetary assets whose ambitions are restricted solely by our imaginations.”

“Our College will emerge stronger from this time — not despite being examined, however due to it,” he added.

Notably, endowment presents to the College dropped from $561 million in FY 2023 to $368 million this yr.

Within the report, Narvekar famous the College’s rising dependence on endowment distributions to fund its operations.

Twenty years in the past, endowment distributions accounted for 21 % of the College’s price range. Now, it accounts for nearly 40 %.

“The ever-increasing reliance on this important useful resource makes our work all of the extra necessary,” Narvekar wrote.

—Workers author Sidney Okay. Lee will be reached at [email protected]. Comply with her on Twitter @sidneyklee.

—Workers author Thomas J. Mete will be reached at [email protected]. Comply with him on Twitter @thomasjmete.