“Secrets of the Academy: The Drivers of University Endowment Success” (pdf) provides a useful overview of academic research on endowment performance.

When we considered the top-performing university endowments and contrasted them with other institutional investors, several organizational features of the endowments stand out. First, the top-performing endowments have active investment committees, typically drawn from the ranks of alumni. These bodies typically see their role not as micro-managing the decisions of the investment staff, but rather in setting broad policy and serving as an informed sounding board. The contrast with public pension funds, where the bulk of the staff is drawn from rank-and-file employees, is particularly stark. Second, the staff of successful academic endowments typically has considerable experience and has often worked together for many years. Finally, the staff of successful university and college endowments has an academic orientation, which leads to a process of periodic self-evaluation. Many of these funds occasionally stop to consider the processes that led them to make investments that proved particularly successful or problematic. They often engage in an active dialog with their peers.

Highly recommended. Want to write a great senior thesis in economics? Study the history and performance of the Williams endowment.

Other interesting sections below:

Finally, Figure 1 also suggests a remarkable persistence in the performance of endowments year after year. As shown in the figure, top endowments such as those of the Ivy League (and more generally, large endowments and those of high-SAT schools) tend to post consistently above-average returns. Upon further investigation, we find that persistence also holds true at the low end: endowments which perform worse than average continue to do poorly year after year.

In particular, the two most consistent correlates with private equity
performance were the SAT scores of the student body and the rate of the alumni giving. Why might alternative investments perform better for some schools than others? Although we do not have detailed data to support our arguments here, the key factors are likely to be access, experience, and timing.

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