University endowments are notching their strongest returns in five years thanks in part to gains from SpaceX and other AI bets, with Harvard becoming the latest school to report a gain of more than 20%.
Harvard on Thursday reported a 27.1% gain by its endowment for the fiscal year ended June 30, swelling the endowment's coffers to almost $68 billion. Other big winners include the University of North Carolina system, which gained 37.8% -- about half of that from SpaceX; Washington University in St. Louis, which gained 37.3%; and Stanford, which gained 31.7% in its main investment vehicle.
"You either had SpaceX or you didn't," said Greg Dowling of Fund Evaluation Group, an investment advisory firm whose clients include endowments.
The Massachusetts Institute of Technology's endowment was among those with more modest returns, with a 10.3% gain. A spokeswoman didn't return requests for comment on the endowment's exposure to SpaceX or other venture hits.
U.S. college and university endowments have so far returned a median of 16.1% this past fiscal year, according to early data from Cambridge Associates. A portfolio made up of 70% global stocks and 30% high-quality U.S. bonds -- a typical benchmark for endowments -- gained 17.9%.
SpaceX was among the most widely held investments across schools, according to endowment executives, making its record-breaking IPO one of the great windfalls for American endowments. While its market cap has fallen closer to earth from its post-IPO peak, that has done little to diminish endowments' returns because of how hugely its valuation soared in recent years.
Endowments fund a portion of school operating budgets and pay for financial aid, research and teaching salaries. They typically invest in a mix of public and private assets and have long-term investment horizons.
Harvard disclosed in an August regulatory filing that it had a $2.2 billion direct stake in SpaceX as of June 30; it also had exposure via managers including Thrive Capital and Valor Equity Partners, according to people familiar with the matter. Other investments, including in biotech funds and multistrategy hedge funds, also paid off.
"This was an exceptional year, at an important moment," Harvard endowment chief N.P. "Narv" Narvekar wrote in his annual letter, saying the gains would support Harvard as it "continues to navigate significant challenges." One such challenge: a higher tax on a handful of research universities' net investment income that was included in Trump's big tax bill and kicks in for the 2027 fiscal year. Harvard executives wrote that the increase, from 1.8% to 8%, would cost the university about $300 million annually and would be "several times larger" in a year like this last one.
Stefan Strein recently became head of UNC Management Co., which manages endowments for schools in the UNC System. He said at a September UNC Chapel Hill trustees meeting that it had made an initial investment with a venture capital fund in 2009 and, "17 years later, we are now harvesting an enormous gain."
SpaceX and semiconductor company Cerebras Systems made up roughly half of WashU's gain, said Scott Wilson, investment chief of the school's endowment. The endowment had at least a midteens percentage of its portfolio in Elon Musk's rocket-and-satellite company earlier this year, an unusually large bet for an endowment. Wilson cautioned against focusing on a single year's result, saying endowments are long-term investors that prove themselves over 10-year periods or longer.
Endowments over the past decade had an average annualized return of 10%, the strongest such trailing return since 2005, according to Cambridge. The recent returns helped, but the biggest contributor was fiscal year 2021, when returns in some cases topped 50%. Soaring stock markets and blockbuster venture returns supercharged gains that year, only for a retreat in public- and private-equities markets to cause widespread losses the following year.
Despite endowments' longer-term gains, higher education is facing challenges including inflation, dropping enrollment and the loss of research funds, said Margaret Chen, global head of Cambridge's endowments and foundations practice. "All these things still put a lot of pressure on higher education -- but listen, you take it where you can," she said.
Some endowment chiefs are looking to manage expectations after this year's gains. Robert Durden of the University of Virginia's endowment wrote in his annual letter that such returns "are rare by historical standards, and we hold measured expectations for the years ahead."
The school's endowment gained 27%, boosted by a SpaceX position it had assembled between 2020 and 2021. The endowment's investment in AI-focused hedge fund Situational Awareness also helped. Situational was up about 270% for calendar year 2026 through May before it lost billions of dollars in a swift unwind this summer, after the end of the university's fiscal year.
Durden wrote in the letter that AI across public and private markets "was a material theme" and that biotech and real assets also had contributed to gains.
Stanford University endowment chief Robert Wallace wrote that distributions to the school's operating budget had more than doubled over the last decade. The distribution will make up about a fifth of the operating budget, or more than $2.2 billion, in fiscal year 2027.
The school also noted it didn't increase its undergraduate tuition for the 2026-2027 academic year and that it recently expanded its financial aid.
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