Compass Investments

– The UNC endowment funds return exceeded 30% due to an early investment in SpaceX.

By the time SpaceX went public, it accounted for about 10% of the UNC Management Companys portfolio, which was worth nearly $15 billion.

Other university endowments also benefited from early investments in SpaceX, OpenAI, and Anthropic.

The University of North Carolinas endowment returned over 30% in the year ending in June, and a significant portion of that return was attributable to investments in SpaceX made several years before its IPO.

By the time the company went public, the weight of this single position had grown to about 10% of the nearly $15 billion managed by the UNC Management Company. UNC first invested in SpaceX around the time of the global financial crisis.

Now that this long-standing investment is paying off, a number of other major U.S. university endowments are finally reaping substantial returns from private technology firms.

And this is not unique to UNC. Several large university endowment funds may ultimately catch up toor even outperformthe broader U.S. stock market after many years of lagging behind.

According to data from Cambridge Associates, some of them may significantly outperform the S&P 500 index, which rose by more than 20% in the 12 months leading up to June 30. Margaret Chen, who heads the companys division focused on global endowment and foundation funds, noted that the bulk of the growth came from a limited number of extremely successful private companies.

Margaret also forecasts that the median return across the sector will be very high. Some universities purchased these stakes directly. Others acquired them through private equity fund managers. Many final figures have not yet been disclosed, as valuing private investments takes significantly longer than valuing stocks that trade daily on the stock exchange.

Margaret summed up the years results quite clearly. This year promises to be an outstanding one for institutional investors who have several major private-market winners in their portfolios, she said. , “detected_source_language “: “EN

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It is difficult even for the most active stock pickers to outperform any of these broad indices. Most of them fail to consistently achieve this over the long term. However, large university endowments have taken a different path.

After the 2008 financial crisis, many of these institutions invested heavily in private equity, causing their share of unlisted assets to rise sharply.

In recent years, this has proven to be disadvantageous for them. Valuations of private companies fell after the 2021 boom and have recovered much more slowly than those of publicly traded firms. In addition, there have been fewer IPOs and buyout deals. This has deprived investment firms of the opportunity to sell their assets and return funds to investors.

The gap has become quite noticeable. According to a study by the National Association of College and University Business Officers (NACUBO) and Commonfund, university endowment funds with assets exceeding $5 billion posted an annual return of 7.8% over the three years leading up to June 2025. During the same period, the S&P 500 index yielded an annual return of 19.7% .

The University of Colorado Endowment Fund also found itself in a similar situation. The $3.5 billion portfolio managed by the universitys endowment generated a return of 20.3% in the year ending in June, which was only slightly lower than the S&P 500 index. This can be attributed in large part to SpaceX, a company in which the state began investing in 2009.

UNC invested in SpaceX through Founders Funda venture capital firm founded by Peter Thiel in 2005. UNC Management was one of the funds earliest investors. A few years later, Founders Fund began investing in Elon Musks rocket company.

Then, around 2009 or 2010, Founders Fund again approached UNC Management with a request to invest even more university funds in SpaceX. Holden Thorp, who was then chancellor of the University of North Carolina at Chapel Hill, was strongly opposed to this.

Are you out of your minds? Holden recalls saying to the investment team. “,”detected_source_language”:”RU