Several major US university endowment funds are on track to match or beat the broader market this year, benefiting from substantial stakes in technology firms like SpaceX and OpenAI, which has reversed a multi-year trend of underperformance.
Data from Cambridge Associates shows the S&P 500 gained more than 20% in the twelve months ending June 30, with some university endowments expected to "significantly outperform" the index. Margaret Chen, the global head of endowments and foundations at the consultancy, said gains came from investments in "a small number of extremely well-performing private companies," adding that median endowment returns will look "very strong." These positions were built either through direct stakes or via private equity managers.
Most endowments have yet to release full-year results, partly because valuing some private assets takes time. Chen noted that "for institutions with stakes in a few private market winners, this will be a banner year." For active public market managers, consistently matching or beating the broad US equity market has always been challenging, with most underperforming over the long term.
The strong showing is a return to a historical pattern: large endowments have often benefited from heavy private equity allocations, which many increased significantly after the 2008 global financial crisis. In recent years, however, these allocations have been a drag—private market valuations fell after the 2021 boom and recovered more slowly than public markets, while a dearth of IPOs and M&A activity sharply reduced distributions back to investors, weighing heavily on private-market-heavy endowments.
A study by the National Association of College and University Business Officers and Commonfund found that endowments above $5 billion posted a 7.8% three-year annualized return as of June 2025, versus 19.7% for the S&P 500 over the same period. But the tables have turned decisively this year: rocket company SpaceX's blockbuster listing and surging valuations for AI startups like OpenAI and Anthropic have generated windfall gains for endowments that entered early via private funds or co-investments.
Chris Bitterman, a partner at Cerity Partners, which manages money for endowments including the University of Colorado Foundation, said, "In recent years, many schools were criticized for their private asset holdings. This year you will see... institutions that were once leading the pack returning to the top of the rankings thanks to a cluster of tech names."
Regulatory filings and people familiar with the matter show that as of June 30, Harvard University's endowment held roughly $2.2 billion worth of SpaceX stock—its largest single public-market position ever—already generating substantial investment gains. These tech startup holdings are expected to significantly boost Harvard's investment performance this year, a sharp contrast to 2025 when endowment chief N.P. Narvekar said that "public market assets being underweight relative to private equity" hurt results, with private equity comprising 41% of assets. Harvard declined to comment.
The University of North Carolina endowment has also benefited from an early, post-financial-crisis bet on SpaceX. Sources said the investment had grown to roughly 10% of the University of North Carolina Management Company's nearly $15 billion in assets before the listing, helping the fund deliver returns exceeding 30% for the fiscal year ending in June. The endowment did not respond to a request for comment.
The University of Colorado Foundation, with $3.5 billion in assets, posted a 20.3% return for the fiscal year ending in June, slightly below the S&P 500, partly thanks to a SpaceX investment made in 2009 that has since appreciated to 57 times its original cost.
Scott Wilson, chief investment officer of the University of Washington Investment Management Company, which holds significant stakes in SpaceX and Cerebras Systems—both of which listed this year—said, "2026 should be a good year, driven primarily by SpaceX, Cerebras Systems, and other co-investment projects."
Alongside rebounding returns, distributions from investments have also picked up, just as a lack of capital returns had become a major headache for endowments. Bitterman said the University of Colorado Foundation began seeing a recovery in private equity distributions in the fourth quarter of 2025, with further acceleration in the first half of this year. "We're starting to see some liquidity come back," he said, referencing a "tough three years" in private markets.
Endowment leaders say the strong gains validate the upside of venture capital, despite risks around exit difficulties and technology failures. Bitterman recalled the foundation's early SpaceX investment: "We thought at the time that even if SpaceX achieved just one-tenth of its original goals, this would be a fantastic investment."
Still, the venture capital recovery is heavily concentrated in a handful of companies. How much each endowment holds in these names will directly drive divergence in performance. PitchBook and the National Venture Capital Association report record US venture exit volume of $347 billion in the first quarter of this year—but excluding the five largest deals, the total would drop by 87%.
Mark Horning, president and CEO of Commonfund's private equity business, said of high-growth tech startups: "If you didn't invest in these companies, it's very hard as an investor to capture the upside from those valuation gains." The heavy reliance on a few high-growth firms has also led some investors to question whether the rally is sustainable. One private university endowment executive, whose fund is on track to beat the S&P 500 this fiscal year, said, "This kind of return is an outlier, not the norm. It often takes years for the next generation of blockbuster winners to emerge."
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