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The University of California’s endowment and pension fund each returned more than 12% for the fiscal year ending June 30, boosting the total asset value of the university’s investment portfolio by $16 billion to $180 billion.
Some $1.3 billion of that $16 billion gain came from a single S&P 500 index fund—one which excludes tobacco and fossil fuel investments—that provided the portfolio with its single biggest investment gain.
“This past fiscal year was about investing only in what we fully understand and taking full advantage of low-fee index funds guided by what we call the UC Investments Way,” said UC CIO Jagdeep Singh Bachher in a statement. “It’s about simplicity and leveraging our scale to concentrate on areas where we have strong conviction.”
Bachher added that he believes the U.S. and “its resilient economy and thriving innovation ecosystem … is the best place to invest,” and the UC system has backed that up by allocating approximately 75% of its portfolio to domestic investments.
The university’s endowment returned 12.8% for the fiscal year, while its pension fund earned 12.2%. The portfolio’s second-biggest investment gain came from real estate and data centers, which contributed $1.2 billion to its annual return. Bachher also said that a decision to invest in India eight years ago, “when the rest of the world was focused on China,” resulted in those assets rising as much as 42% during fiscal 2024.
The UC pension’s asset value rose to $98.6 billion as of June 30, up from $88.3 billion one year earlier, and reported five- and 10-year annualized returns of 7.9% and 6.9%, respectively, along with 20- and 30-year annualized net returns of 6.9% and 8.6%, respectively.
The UC Endowment rose to $29.5 billion from $23.4 billion the previous year and has increased in size by 188% over the past seven years. The endowment posted five- and 10-year annualized returns of 9.4% and 8.1%, respectively, and 20- and 30-year annualized net returns of 7.9% and 9.3%, respectively.
The assets in the UC Retirement Savings Program, the university’s defined contribution plan, rose to $39 billion during the fiscal year from $33.7 billion in fiscal 2023, the fund reported.
“Our Chief Investment Officer Jagdeep Singh Bachher and his team are always innovating and, critically, keeping the current and future needs of the University front and center in their investing strategy,” said UC Regent Mark Robinson, chair of the university’s investments committee, in a statement. “Since Jagdeep joined 10 years ago, our pension assets have doubled and the endowment assets more than tripled thanks in large part to the team’s strong performance record.”
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University of California Reports Biggest One-Year Gain in History
The University of California Pension Fund Lowers Expected Rate of Return
Tags: data centers, Endowment, fiscal year 2024, Fossil Fuels, FY 2024, index fund, Jagdeep Singh Bachher, Mark Robinson, Real Estate, S&P 500, Tobacco, University of California
