“The strong performance of the endowment contributes significantly to the financial health of the University in what remains a difficult economic climate,” Provost Christopher Eisgruber ’83 said in the University statement.
Princeton’s endowment remains the third largest in the Ivy League, behind Harvard’s $27.4 billion and Yale’s $16.7 billion. The endowment returns at those schools were 11.0 percent and 8.9 percent, respectively, for the year.
Among Ivy League universities, Columbia reported the highest return — 17.3 percent — while Yale’s return was the lowest.
Princeton was the last Ivy League school to release its endowment return figures this year.
The relatively strong gains made by Princeton’s endowment will not have an immediate effect on students’ day-to-day lives. The budget for the current fiscal year is approximately $1.2 billion, roughly $170 million lower than its peak two years ago.
Next year’s budget will increase only “modestly,” Eisgruber said in an e-mail to The Daily Princetonian.
“All of the $170 million in cuts that we made earlier will have to remain in place,” he added. “This year’s endowment returns enable us to avoid the need for further cuts, but do not enable us to restore cuts made previously.”
Over the past year, the median return for institutional funds — a category including pensions, endowments and foundations — was 13 percent, according to Wilshire Associates, a consulting and advisory firm that tracks the performance of university endowments.
The S&P 500 rose 12 percent over the same period.
Eisgruber noted that because this year’s return is “within [the] normal range,” it will “not affect the University’s multi-year outlook.”
The average annual return of Princeton’s endowment over the past decade was 7.9 percent, placing it in the top percentile of the 428 institutions that report to the Trust Universe Comparison Service.
In April 2009, the University announced a two-year plan to cut an average of 7.5 percent from all academic departments’ budgets in anticipation of a 30 percent endowment loss.
The University typically aims to spend between 4 and 5.75 percent of its endowment each year, though the figure passed 6 percent for the previous fiscal year. With this year’s gains, the spending rate will fall back to 5.1 percent.
Princeton University Investment Company President Andrew Golden has run the endowment since 1995, after spending five years working for Yale’s Chief Investment Officer David Swensen.
Swensen developed a model of portfolio management that used broad diversification with an emphasis on equity and relatively illiquid investments in order to achieve higher returns.
Amid huge losses in university endowments caused in part by lack of liquidity, this method of management received much criticism in the past year.
PRINCO will certify the results at its board meeting on Thursday.
Read More
Lawsuits filed against University after cybersecurity incidents
Shaun KaraniMultiple lawsuits have been filed against Princeton in the wake of a widespread cybersecurity breach.
Multiple lawsuits have been filed against Princeton in the wake of a widespread cybersecurity breach.
Israeli consulate visits Princeton to discuss experience of Jewish students, follows Tsurkov release
Luke GrippoFor the first time since the 2024 “Gaza Solidarity Encampment” at Princeton, Yuval Donio Gideon, head of the Public Policy Department of the Consulate General of Israel in New York, met with University administrators and campus rabbis to discuss the experience of Israeli and Jewish students on campus.
For the first time since the 2024 “Gaza Solidarity Encampment” at Princeton, Yuval Donio Gideon, head of the Public Policy Department of the Consulate General of Israel in New York, met with University administrators and campus rabbis to discuss the experience of Israeli and Jewish students on campus.
Trump administration announces new travel, visa restrictions in last days of semester
Luke GrippoNew travel restrictions announced by the Trump administration could impact international students returning to campus after break.
New travel restrictions announced by the Trump administration could impact international students returning to campus after break.