Leading U.S. university endowments posted returns in the financial year ending June 2025 that matched or in some cases exceeded the S&P 500, after early private investments—most notably stakes in SpaceX and in AI-focused startups such as OpenAI and Anthropic—generated significant gains. Reporting by the Financial Times and data from Cambridge Associates show this marked a reversal of a multi-year period of relative underperformance.
What drove the turnaround?
Cambridge Associates found that the S&P 500 rose by more than 20 percent in the twelve months to June 2025. Margaret Chen, global head of the endowment business at Cambridge Associates, said that many foundations benefited from holdings in a small number of highly successful private companies, held directly or via private-equity managers.
Private-company valuations fell after their 2021 peak and recovered more slowly than public equities, and a lack of IPOs and acquisitions meant payouts to investors dried up. This dynamic changed in 2025 as SpaceX’s public listing and soaring valuations of AI startups delivered outsized returns for institutions.
Concrete examples and figures
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The Harvard University endowment held roughly $2.2 billion worth of SpaceX shares as of June 30, 2025, representing one of the largest single equity positions reported by an endowment.
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At the University of North Carolina, the SpaceX investment accounted for about 10 percent of the near-$15 billion portfolio before the company’s public listing, contributing to annual returns in excess of 30 percent.
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The University of Colorado endowment returned 20.3 percent in the period, largely thanks to a SpaceX investment made in 2009 that grew to 57 times its original value.
Concentration of returns and revived distributions
Alongside rising returns, distributions from private-equity funds also picked up. The University of Colorado’s endowment experienced an initial turnaround in the fourth quarter of 2025 that accelerated into the first half of 2026. Nonetheless, venture-capital returns remained highly concentrated: U.S. venture exits reached a record $347 billion in the first quarter of 2026, but that total would have been 87 percent lower without the five largest transactions.
As a result, differences in endowment performance were largely driven by whether an institution had exposure to this small set of standout technology companies.
Why this matters
The 2025 financial year illustrates that private-market exposure, particularly early-stage positions in transformative technology firms, can produce large gains for institutional investors—but those gains are unevenly distributed and dependent on timing and concentration. The year’s winners were the endowments that had sizable, early commitments to SpaceX and key AI companies.
An AI assistant contributed to the preparation of this article; the final text was edited and verified by a journalist. This article does not constitute investment advice or a recommendation.
