Top Performing Institutional Investors are Allocating 40% to Private Investments

March 21, 2019, Updated June, 4, 2020

According to the latest research conducted by Cambridge Associates¹, top decile performing institutional investors have increased their private investment* allocations to a mean of 40%.

Private Investment Allocation

20% Pie Chart of Private Investment Allocations1998

40% Pie Chart of Private Investment Allocations2018

Private investments

*Private investments include non-venture private equity, venture capital, distressed securities (private equity structure), private real estate, private oil & gas/natural resources, timber, and other private investments.


Many of the world’s leading institutional investors allocate substantially to private investments.

Private Investment Allocations Columbia University

39.5%2

Private Investment Allocations Princeton University

49.6%3

Private Investment Allocations Yale University

52.4%4

Private Investment Allocations University of Texas

57%5

1Cambridge Associates Research Report February 2019, 2Columbia University 2018 Financial Report, 3Princeton University Report 2017-2018, 4Yale News; 5University of Texas

The higher the allocation to private investments, the better the returns.*

According to Cambridge Associate's endowment and foundation research, the average annualized return for a greater than 15% allocation was 8.1 %, 160 basis points higher than the group with a less than 5% allocation.

20 year Average Return (%)

Scatter Chart for Private Investment Allocations

20 year Average Private Investment Allocations (%)

Private equity allocations under 5%

Private equity allocations between 5% and 15%

Private equity allocations over 15%


*Analysis includes 132 endowments and foundations that provided returns and beginning year asset allocation for each June 30 from 1998 to 2018. Subgroups are based on each institution's 2 0 -year average allocation to private investments. Solid lines are drawn where the median private investments allocation for the entire universe with the median return for the entire universe.
**Private investments include non-venture private equity, venture capital, distressed security (private equity structure), private real estate, private oil & gas/natural resources, timber, and other investments. Endowment and foundation data as reported by Cambridge Associates LLC. Graphs are for illustrative purposes only.

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