Aalto University endowment portfolio returned 3.4% in 2015
The Aalto University endowment portfolio total return net of fees was 3.4% in 2015 (7.2% in 2014). The average return since inception has been 4.9% per annum. At the end of the year, the market value of the endowment portfolio was EUR 901 million.
During the year a liquidity portfolio was separated from the endowment portfolio. At the end of 2015 the market value of the liquidity portfolio was EUR 74 million. Liquidity portfolio yielded 0.5%. The market value of the university’s total portfolio was EUR 976 million (EUR 996 million in 2014).
The financial markets had a strong start for the year, initiated by the policy actions of the ECB in January. All asset classes in the university portfolio posted strong returns in the first four months. However, worries over global growth started to emerge during the spring, with Greece, China and commodity prices in the headlines. In addition, anticipation of the first rate hike by the FED caused nervousness in the markets. Market volatility increased significantly from the low levels seen in previous years and returns on the most risky assets remained weak in the second half of the year.
At the end of 2015, 50% of the endowment portfolio was invested in equities and 50% in fixed income and money market investments. Allocation to equities was increased by ca. 4% during the year. Return from equity investments was 8.0% and from fixed income and money market investments -0.8%.
The endowment provides the university with greater financial independence and enhances its ability to direct resources to strategic focus areas. The returns from the endowment are expected to cover ca. 5% of the university annual operative budget in the coming years.
Additional information:
Head of Investment Kati Eriksson
Aalto University
+358 40 563 6110
[email protected]
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