The Ivy Coach Daily
October 9, 2020
Brown University Endowment ROI
Brown University’s endowment notched a 12.1% return on investment for the fiscal year that ended this past June. The figure marks the highest among Brown’s Ivy League peers. Brown’s investors also significantly outperformed U.S. endowments across the board, which averaged a 2.6% ROI for the year. It seems the folks in charge of Brown’s endowment leave no stone unturned — even hiring private detectives to make sure certain fund managers check out.
Brown’s Endowment Doesn’t Top the Ivy League
Juliet Chung and Dawn Lim report on Brown’s banner investment year in a piece published today in The Wall Street Journal: “How Brown University’s Endowment Quietly Became Tops in Ivy League.” It should be noted, however, that the title of the piece is quite misleading as the size of Brown’s endowment isn’t anywhere near tops in the Ivy League. That distinction belongs to Harvard University. We believe the journalists meant to write, “How Brown University’s Return on Its Endowment Quietly Became Tops in the Ivy League.”
The ROI on Brown’s Endowment Tops the Ivy League
In any case, as Chung and Lim report, “The $4.7 billion endowment has hired private detectives to investigate a money manager and backed unproven startup funds. The endowment’s former head and current adviser has also hosted some prospective managers for dinner with his family, supplementing Brown’s due diligence. The approach has paid off. Brown’s endowment over the course of Joseph Dowling ’s seven-year run has produced top-tier results…It was the second year in a row that Brown’s return rate beat those of the Yale University and Harvard University endowments, though they run far larger pools of money.”
Other Universities May Seek to Poach Brown’s Investment Leaders
It will be interesting to see if the likes of Harvard and Yale or other universities, particularly other Ivy League schools, seek to poach Mr. Dowling and/or any members of his very successful investment team, particularly during a year in which so many universities are struggling financially due to the COVID-19 pandemic. Or is Brown’s secret weapon, Starwood Capital’s Barry Sternlicht? The Brown alumnus serves as an advisor to the university’s endowment fund and, well, the man who founded Starwood Hotels is — to say the least — a financial whiz.
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