Endowment and Investment Management

Endowment Highlights

FOR THE YEAR ENDING JUNE 30, 2023

  • USF’s endowment is invested in a diversified portfolio valued at approximately $510 million, which has increased by $32 million in the last year. 
  • The total USF endowment has grown  77%  over the last 10 years, increasing from approximately $288 million to $510 million.
  • The endowment’s average annual return for the past 10 years was 8.6%, well above the peer benchmark of 6.5%, ranking the endowment in the top 2% of its peer group.
  • There are currently over 600 individual endowment funds at USF.
  • $17 million in new gifts and contributions were added to the USF endowment during the past year.
  • Spending from the endowment during the fiscal year ending May 31, 2023 provided over $22 million to support USF students, faculty, and programs.

Endowment Report

The endowment at the University of San Francisco is an important part of our overall financial well-being. Endowment funds provide an ongoing source of stability and growth and are critical to supporting the university and our students through periods of economic volatility. Over time, the growth of our endowment provides a continuous, strong, and permanent source of financial support for the university. It allows USF to make commitments to the future, knowing resources and income will be reliable and available.

Total Value of the Endowment

The year ending June 30, 2023 was a period of strong growth for the endowment, with the total value of the endowment increasing from $478 million to $510 million. The cumulative growth of the endowment, which has increased 77% over the last 10 years, is a result of investment appreciation, new donor contributions, and funds designated by USF’s Board of Trustees. All have played an important role in the overall growth of the endowment. 

Endowment Performance 

The annual rate of return for the endowment for the year ending June 30, 2023 was 9.1% net of investment fees, compared to the peer benchmark of 9.6%. The investment environment during the year was a welcome rebound from the declines most university endowments experienced during 2022. The university’s composite portfolio return was slightly lower than its benchmark for the year,  with venture capital, private equity, and other alternative investment returns returning well below the returns of the public markets.  For example, the one-year return for Venture Capital investments, which represents approximately 12% of the endowment, was -1.3%, compared to 16.1% for the endowment’s U.S. public investment portfolio. However, the returns for the endowment’s private investments have exceeded those of the public market by quite a bit over longer-term time horizons, contributing to the endowment’s overall strong performance.

Over the past 10 years, the managed endowment has achieved an annualized rate of return of 8.6%, exceeding the InvestorForce peer benchmark of 6.5%, placing it in the top 2% of its peer group. The endowment’s annualized rate of return significantly exceeded the target of the Consumer Price Index (CPI) plus 4.5% for the 10-year period. The portfolio is designed to produce returns that exceed its long-term target over time, which allows the endowment to distribute 4.5% of the portfolio’s average market value over the last three years and to preserve purchasing power for future generations.
 

Endowment Asset Allocation

Most of the assets within the endowment are pooled and invested in one managed endowment portfolio. The Investment Committee regularly monitors asset allocation targets and has constructed a diversified portfolio through the selection of active investment managers across multiple asset classes. These targets are based on a long-term investment horizon and are determined based on an ongoing assessment of expected risks, returns, and correlations across asset classes. As of June 30, 2023, the asset allocation was overweight to domestic equity, diversifying assets, and private capital, and was underweight to these targets in all other categories. The Investment Committee re-balances the portfolio as needed, based on recommendations from an external consultant and USF management.