Yale University increased its allocation to private equity and real assets last year amid a market crisis that led to the endowment losing a total of $5.6 billion for the year. Yale University
The endowments actual allocation to private equity is 24.3 percent, and 32 percent to real assets.
Yale sustained heavy losses in the two asset classes last year. Private equity lost 24.3 percent in 2009, while real assets dropped 33.9 percent to become the worst performing asset class of the year.
“The heavy allocation to non-traditional asset classes stems from their return potential and diversifying power,” the endowment said in its 2009 annual summary. “The real assets portfolio plays a meaningful role in the endowment as a powerful diversifying tool and a generator of strong returns.”
Yale said over the past 10 years, real assets had delivered 13.5 percent annualised returns.