Columbia reported on Sept. 27 an investment return of 11.5 percent on its endowment for the fiscal year of 2024—putting the University on track to outperform peer institutions in investment returns. The past year’s gains bring the endowment up to $14.8 billion from $13.6 billion in fiscal year 2023 following a $1 billion dip in fiscal year 2022.

Columbia reported five-year and 10-year returns of 8.5 percent and 7.4 percent, respectively, with the latter slightly decreasing from 8 percent. The University notably benefitted from both a strong year of public equities and the recent fiscal year being a strong year for public market performance, Kim Lew, Columbia Investment Management Company president and chief operating officer, explained in a news release.

“We benefited both from our exposure to public markets and from strong performance of individual managers relative to benchmarks,” Lew wrote.

Columbia’s peers who followed the “Yale model”—which favors allocating a majority of its investments to alternative investments, such as venture capital, and less allocation to U.S. equities and bonds—suffered as venture capital continued another negative year with a 4.6 percent loss. Columbia’s portfolio includes some alternative investments—private equity and venture capital—with the former having a strong return performance of 6.5 percent in the fiscal year.

Columbia is positioned to outperform peers with the inclusion of Stanford University and Massachusetts Institute of Technology, according to recent estimates by the investment analysis company Markov Processes International. The company’s predictions are made through its Transparency Lab, which aims to form a clearer picture of top universities, corporations, and institutions’ investments.

Markov Processes International is predicting that Harvard University, Yale University, and Princeton University could potentially see returns lower than Dartmouth College, which, for fiscal year 2024, reported an 8.4 percent return on its endowment.

The news release emphasized the endowment as a “critical form of support for University academic programs, faculty research, and student financial aid.” Over 50 percent of undergraduates in the fiscal year 2024 received financial aid, in part due to donors and endowment support.

“We remain focused on building an asset base that supports Columbia’s core mission,” Lew said.

Columbia’s endowment is notably smaller in size compared to its peers—Harvard University, Princeton University, and Yale University’s endowments are $50.7 billion, $34.1 billion, and $40.7 billion, respectively.

The University also has a relatively small endowment-to-student ratio of approximately $412,000 per student in comparison to its peers, in part due to its comparatively large student body. Harvard University, Princeton University, and Yale University’s endowment-to-student ratios are approximately $2.006 million per student, $3.874 million per student, and $2.698 million per student, respectively. As such, the University has to make do with less support from the endowment for one of the larger student bodies in the Ivy League.

Markov Processes International estimates Columbia’s endowment to have the lowest risk portfolio among its peers. As such, Columbia’s investments within its portfolio are relatively safe with less volatility when it comes to changes in the market.

According to Markov Processes International’s estimates, “Columbia’s long term return efficiency through FY2023 was only exceeded by Yale - and slightly below the Global 70/30,” a benchmark that represents a portfolio with a 70 percent allocation to equities and a 30 percent allocation to fixed income.

Lew said in the news release that returns in the private assets have “lagged our marketable assets portfolio,” although they have positively contributed to the endowment’s performance in the past year.