Aalto University endowment portfolio returned 6.5% in 2017
The Aalto University endowment portfolio total return net of fees was 6.5% in 2017 (6.1% in 2016). The average return since inception has been 5.2% per annum, net of fees. The market value of the endowment portfolio was EUR 1 052 million (EUR 948 million 31.12.2016). In addition to endowment management operations, the portfolio grew due to government capitalization related to the university fundraising campaign 2014-2017 and the newly established Tenure Track Fund to enable new tenure track recruitments.
At the end of 2017, 44 (51) % of the endowment portfolio was invested in fixed income, 52 (48) % in equities and 4 (1) % in alternative risk. Allocation to alternative risk was increased in line with the endowment strategy. In addition, allocation to equity risk was increased in the second half of the year due to allocation changes and launch of the private equity programme.
Risky asset classes continued to perform strongly in 2017, with equity investments returning 11%. The biggest positive return contributors were investments in European and emerging markets equities. Investments in emerging markets’ hard currency debt contributed strongly in 3.3% credit risk return. Interest rates fluctuated throughout the year. The interest rate sensitivity of the endowment portfolio was kept on low levels and return on fixed income remained slightly positive. Alternative risk returned 5.5%. The appreciation of Euro against other currencies had negative contribution to total return.
|
Allocation 31.12.2017 |
Return 2017 |
Annual return since inception (05/2010) |
|
|
Risk free |
13.1% |
-0.2% |
1.0% |
|
Interest rate risk |
4.7% |
0.5% |
2.5% |
|
Credit risk |
26.6% |
3.3% |
4.2% |
|
Equity risk |
51.6% |
11.0% |
8.9% |
|
Alternative risk |
4.0% |
5.5% |
0.6% |
|
Aalto Endowment Portfolio |
100% |
6.5% |
5.2% |
Additional information:
Head of Investments Kati Eriksson
Aalto University
+358 40 563 6110
kati.eriksson@aalto.fi
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