Not Out of the Woods Yet - Kevin Kiley, Inside Higher Ed

While 2011 endowment returns make it look like investing is back to the good old days, colleges and universities aren't in the clear yet. College and university endowments returned an average of 19.2 percent in the fiscal year that ended June 30, 2011, a rate that more closely resembles pre-recession levels than those of the preceding two years, according to an annual survey compiled by the National Association of College and University Business Officers and Commonfund, an investment firm for nonprofit organizations. And unlike the recession years, when smaller endowments had higher rates of return than wealthier institutions, the spread was closer to that of the mid-2000s. Institutions with large endowments, which often tend to have more money invested in "alternative strategies" such as hedge funds, venture capital, private equity, and private real estate, saw the highest returns, while smaller endowments, with more money tied up in domestic equities and fixed-income investments, had lower returns.