Yale endowment exceeds real estate 2018 target

The $29.4 billion Yale University endowment posted a 10.3 percent actual allocation as of June 2018 for its real estate portfolio, exceeding its 9.5 percent target, according to its 2018 report. However, the allocation was lower from the 10.9 percent real estate actual in the prior year.

The combination of quantitative analysis and market judgment employed by Yale produces the following portfolio:

Real estate generated a 2.7 percent annualized return over the 10-year period, underperforming the MSCI U.S. REIT Index by 3.9 percent per year and the pool of Cambridge Associates real estate managers by 2.1 percent per year.

The heavy allocation to nontraditional asset classes stems from their return potential and diversifying power. Today’s actual and target portfolios have significantly