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The University’s endowment realized a 19.6 percent return for the fiscal year that ended on June 30. The total value of the endowment rose to $21 billion, the University announced on Friday afternoon.

This is above Harvard’s return of 15.4 percent, while slightly lower than Yale’s 20.2 percent return. Overall, the University has the second highest return in the Ivy League this year, not counting Cornell which has yet to release its results. Harvard, which has consistently trailed behind other Ivies despite having a larger endowment, had the lowest returns.

A typical portfolio mix of 65 percent stocks and 35 percent of equities and bonds would have returned 17.5 percent over the same time period. However, the University’s endowment is invested in a larger part in illiquid investments which may have greater rates of return.

Last year, Princeton's endowment was valued at $18.2 billion after an 11.7 percent return. The endowment shrank slightly in 2012 because a 3.1 percent return did not outpace the percentage taken out and used in the University’s operating budget for that year.

The Princeton University Investment Company, which manages the University’s endowment, certified the return on Thursday at meeting of its board of directors.

Princo President Andrew Golden said he was pleased with the results.

“It’s a very satisfying year,” Golden said. “Endowment management is really thinking about how to balance opportunity and risk in the pursuit of creating funds to support the University’s mission.”

Golden explained that the 10-year annualized return is more important when considering Princo’s performance. “While it is natural for the world to focus on annual numbers I think its much more important to focus on the long term,” he explained. “I’m more satisfied with the 10.5 percent annualized return over 10 years than how we do in any given year.” Golden also noted that this return spans the period of the global financial crisis.

The 10-year average return on the endowment places the University among the top percentile of the 520 institutions reporting to the Trust Universe Comparison Service, according to a University press release.

Among Princo’s best performing assets were illiquid investments, according to Golden. The endowment has seen particularly strong performance in venture capital and the biotech industry, he explained. Golden noted that both of these categories are inherently riskier than the broad-based market, but Princo seeks to address that risk by diversifying across a variety of asset classes.

While the endowment saw a particularly strong return this year, Golden says that returns of this magnitude are not typical.

“It makes sense to think of returns as reflecting a random number generator. All these systems have a result of inherent variability,” he explained. “In any one given year, you are pleasantly surprised when you can produce a 19.6% return. If you had to bet if next year would be above or below 19.6, the smart bet is below.”

Earlier this year, a report by the Priorities Committee noted the need to “reset community expectations for growth that were driven by almost 20 years of exceptionally favorable investment conditions that may well not return in the foreseeable future.”

Golden noted that a typical return would likely fall in the low double digits. “We believe that we can generate a return that can support spending on average of about 5% plus inflation, plus kind of overshoot that a little bit to ensure stability in spending. If you add that all up that kind of gets you to a number in the low double digits, say 10.5 … over the coming decade we have a shot at that low double digit return.”

Correction: Due to an editing error, an earlier version of this article incorrectly stated the number of institutions that report their endowment figures to theTrust Universe Comparison Service. The number is 520. The 'Prince' regrets the error.

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