Washington University in St. Louis just tallied a standout year, returning 37.3% for the 12 months through June. A small wager nearly a decade ago on SpaceX has ballooned, with that initial $50 million stake and additional positions via outside managers now worth more than $2 billion to the portfolio. The success helped push total assets to north of $19 billion, most of it in the endowment. This year was the first in which SpaceX allowed public participation in share sales, and Cerebras Systems Inc. completed an IPO, both contributing to the lift.
Scott Wilson, who has overseen the endowment since 2017, said venture and growth equity "did really well across the board." He also noted, "We've planted a lot of seeds in the last nine-plus years," adding, "We're super hopeful some of these will have an outsized impact on the portfolio." IPO-related gains accounted for about half of returns in the period. Beyond tech, positions in commodities as well as emerging and frontier markets also posted solid results. An early SpaceX allocation with Vy Capital, made before Wilson arrived, figured prominently.
Some schools with early exposure to SpaceX and other richly valued tech names have, in certain cases, raced far ahead of the 18.9% median return before fees for large endowments in the same period, per Wilshire's Trust Universe Comparison Service. The University of North Carolina reported a 37.8% gain through June, helped by an early SpaceX position via a venture fund. Harvard and Vanderbilt are also among those that benefited from SpaceX. The University of Pennsylvania returned 27.4% and declined to share the drivers.
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There is a catch: several wealthy private universities now face much steeper federal taxes on realized gains from endowment investment income. Harvard and Yale now pay an 8% levy, previously 1.4%, while Washington University, Duke and Brown are in a group taxed at 4%. Translation for your wallet: when big, long-held private stakes finally cash out, the headline return is only part of the story - timing, liquidity and taxes can change the take-home result in a hurry.
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