By David G. Barry
Two of the three major universities in North Carolina’s Research Triangle area saw their endowments report positive results for the fiscal year ended June 30 – putting them among the few schools in the country that did so. The University of North Carolina reported a gain of 4.4% while North Carolina State University said it gained 3.2%. The third school in the Triangle, Duke University, had a loss of 1.5%.
The University of North Carolina’s UNC Investment Fund LLC has the second-largest reported return by an endowment, bested only by the Kansas State University endowment, which had a 5.7% return. The UNC Investment Fund grew during the fiscal year from $5.10 billion to $5.24 billion and handily beat its 0.1% benchmark. The fund generated an investment return of $236 million, received contributions of $108 million and made a distribution to the school of $200 million. Over the past 10 years, the fund has distributed $1.79 billion and seen its value more than double from its $2.21 billion value on June 30, 2012.
In a report on the endowment, the university said the fund’s “significant outperformance” was due to its private investment portfolio – private equity, real estate, energy and natural resources – returning more than 35% for the 12-month period. It also said its portfolio of “diversifying strategies” contributed with a return of 8.2%.
The UNC Investment Fund is managed by the UNC Management Company. Jonathon King is chief investment officer of the UNC Fund and is president and CEO of UNC Management. He joined UNC in 2005 after being CIO of Dartmouth College. Private investments are led by Kevin Tunick, who joined UNC in 2008 after being vice president of private equity at Harvard Management Co.
North Carolina’s State’s NC Investment Fund grew by $64.8 million during the fiscal year to $1.66 billion. Equally impressive, it beat its benchmark of negative 9% by 12.2%. Its three-, five- and 10-year returns of 13.7%, 11.9% and 10.6%, respectively, also were significantly above its benchmarks.
According to its investment policy, the NC Investment Fund looks to have 36% of its capital in private asset market strategies, 33% in public equity-oriented strategies, 21% to other strategies designed to have relatively low correlations to equity and fixed income instruments and 10% to public fixed income investments and cash.
NC’s actual allocations to those segments was not disclosed.
The framework for NC’s success was set in place by Libby George, who retired as director of investments in January 2022. She was at North Carolina State for 30 years. The NC Investment Fund is now overseen by Chris Ip, who joined North Carolina State as its first CIO in August. He previously was director of treasury at Vanderbilt University Medical Center and served as head of private capital for TIAA, was CIO of a family office and a managing director at the University of Pennsylvania’s Office of Investments.
Duke University’s endowment fell from $12.7 billion to $12.1 billion, according to the Duke University Management Co. (DUMAC), which manages the endowment. It did not disclose benchmarks but did say that the endowment has returned an annualized 11.3% for the 10 years ended June 30.
For the fiscal year ended June 30, 2021, Duke returned a net 55.9%.