Strong positions in technology companies such as SpaceX and OpenAI are helping several major US university endowments match or beat the broader stock market, ending a multi-year period of underperformance against benchmark indices.
Cambridge Associates, a firm that tracks endowment performance, indicated that some funds are projected to "significantly outperform" the S&P 500, which rose over 20% in the 12 months ending June 30. Margaret Chen, the firm's global head of endowment and foundation services, attributed the gains to a "small number of exceptionally well-performing private companies" and noted that median endowment returns are expected to be "quite impressive." These holdings are owned directly or through private equity managers, and most endowments have not yet published annual results, partly due to time-consuming valuations of private assets.
Chen stated that "for institutions with exposure to a few top-quality private market companies, this will be an especially strong year."
Active managers in public markets have historically struggled to match or surpass US equity returns, with most products lagging their benchmarks over the long term. The recent outperformance of certain endowments signals a return to long-standing historical trends, where large funds have benefited from significant allocations to private equity, a strategy many increased following the 2008 global financial crisis.
However, these allocations dragged on performance in recent years. Private market valuations fell after a hot 2021, recovering more slowly than public equities. Additionally, a shortage of IPOs and mergers and acquisitions cut off distribution channels for investors, further pressuring private-market-heavy endowments. Data from NACUBO and Commonfund shows that endowments with assets over $5 billion returned an annualized 7.8% in the three years through June 2025, while the S&P 500 returned 19.7% annually over the same period.
The dynamics have now shifted. The high-profile listing of SpaceX and surging valuations for AI startups like OpenAI and Anthropic are generating windfall gains for endowments that invested early, either through private funds or co-investments. Chris Bittman, a partner at Cerity Partners who manages money for the University of Colorado Foundation and other endowments, noted that "many universities have felt performance pressure from private asset exposure in recent years," but added that "this year, you'll likely see leading institutions return to the top of the rankings thanks to certain tech holdings."
Regulatory filings and insiders reveal that Harvard University's endowment held approximately $2.2 billion worth of SpaceX shares as of June 30, its largest single public market stock position ever, yielding substantial investment gains. Sources familiar with the fund say its stakes in leading tech startups could significantly boost this year's results, reversing the situation in 2025 when fund head N.P. Narvekar said the fund's underweight to public equities relative to private equity (which made up 41% of assets) hurt performance.
The University of North Carolina's endowment is also benefiting from an early bet on SpaceX made during the global financial crisis. Sources say the investment had grown to about 10% of the nearly $15 billion in assets under management at UTIMCO before the SpaceX listing, helping the fund achieve returns exceeding 30% for the year through June. The endowment did not respond to requests for comment.
The University of Colorado Foundation, with $3.5 billion in assets, returned 20.3% for the year through June, slightly below the S&P 500. Part of these gains came from a SpaceX investment made in 2009, now worth 57 times the original cost.
Scott Wilson, chief investment officer at the University of Washington Investment Management Company, which holds significant stakes in two tech startups that listed this year, expects "2026 to be a good year, driven mainly by SpaceX, Cerebras Systems, and other co-investments."
Alongside stronger returns, distribution payouts to funds are also increasing, addressing a major challenge for endowments. Bittman noted that distributions from private equity at the University of Colorado Foundation began recovering in the fourth quarter of 2025 and accelerated in the first half of this year, saying "we're starting to see some liquidity return" after a "very difficult three years" in private markets.
Endowment leaders say the strong results highlight the potential upside of venture capital, despite challenges with exit strategies and the risk of technology adoption failures. Reflecting on the University of Colorado Foundation's early investment in SpaceX, Bittman recalled, "we thought even if SpaceX achieved only a tenth of its goals, it would still be an excellent investment."
However, the recovery in venture capital is concentrated among a few companies, leading to divergent outcomes for endowments: benefits depend on whether they had exposure to these opportunities. PitchBook and NVCA data show US venture exit value hit a record $347 billion in the first quarter, but would be 87% lower excluding the five largest transactions. Mark Hoying, president and CEO of Commonfund Private Equity, said that "investors who didn't back these high-growth tech startups may not capture the gains from this appreciation."
The heavy reliance on a few high-growth companies is also prompting some investors to question whether this momentum is sustainable. An executive at a private university endowment, which expects to beat the S&P 500 for the year through June, commented, "this kind of return is an exception, not the norm. The next cohort of top-quality targets could take years to emerge."
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