John Taylor, Professor of Economics at Stanford University and developer of the "Taylor Rule" for setting interest rates | Stanford University
John Taylor, Professor of Economics at Stanford University and developer of the "Taylor Rule" for setting interest rates | Stanford University
Stanford University has reported an 8.4% return on its Merged Pool investment for the fiscal year ending June 30, 2024. This performance, after accounting for all costs and fees, is below the median return of 10.1% for U.S. college and university endowments as noted by Cambridge Associates. A standard "70/30" portfolio consisting of global stocks and high-quality U.S. bonds yielded a 13.5% return during the same period.
The university's five- and ten-year net annualized returns were 9.9% and 8.6%, respectively, surpassing the median returns of other institutions at 9.0% and 7.0%. Comparatively, a typical "70/30" passive portfolio returned lower figures of 7.3% over five years and 6.2% over ten years.
Robert Wallace, CEO of Stanford Management Company, stated that "strong results in publicly traded securities were diluted by weaker performance in non-marketable asset classes, including private equity." He added that while these private assets have recently detracted from performance, they have historically enhanced results over longer periods.
As of June 30, 2024, the Merged Pool was valued at $42.8 billion, incorporating capital reserves from Stanford Health Care and Stanford Medicine Children’s Health alongside other long-term funds.
The university's endowment stood at $37.6 billion on August 31, 2024, marking the close of its fiscal year. The endowment supports various university programs with an annual payout contributing significantly to operating expenses—21% in fiscal year 2024 with $1.8 billion disbursed to academic programs and financial aid.
Looking ahead to fiscal year 2025, Stanford plans to increase this payout to $1.9 billion to ensure continued support aligned with inflation rates plus annual disbursements.
The endowment comprises more than 8,100 donor-established funds earmarked for specific purposes such as scholarships and research initiatives across different fields.
Stanford Management Company is tasked with investing these assets following an Ethical Investment Framework aimed at ensuring resources remain available for future generations while partnering with capable entities focused on disciplined investments globally.
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