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Despite the fact that Penn’s endowment is a mere 26 percent of its Crimson counterpart, there are advantages to a smaller endowment — it allows for niche investments and growth potential that would not be possible with larger sums.

With returns of 17.5 percent for the fiscal year ending on June 30 , Penn’s endowment increased to its highest value to date of $9.6 billion, a $1.8 billion increase from the previous year’s valuation of $7.7 billion.

But although Penn’s endowment is greater than the Gross Domestic Products of Tajikistan, Haiti, Fiji and 45 other nations, according to the International Monetary Fund, it falls short in comparison to Harvard and Yale universities, which boast the two largest endowments in higher education at their hefty, recently-announced valuations of $36.4 and $23.9 billion, respectively.

The University’s endowment is typically the fifth largest in the Ivy League, behind Harvard, Yale, Princeton and Columbia universities.

Chief Investment Officer Peter Ammon has experience in both spheres, having come to Penn at the beginning of fiscal year 2014 from Yale’s investment office, where he worked under renowned university investment manager David Swensen.

“The endowment’s size provides the necessary scale for Penn to build a world class investment organization,” Ammon said. “At the same time, we are still nimble enough to capitalize on inefficiencies and opportunities that might not make sense for significantly larger pools of capital.”

Indeed, the 2014 fiscal year saw attractive returns produced by a variety of asset classes.

In fact, the University’s annual return is one of the strongest in recent years, with only the 2011 fiscal year — during which Penn’s endowment returned 18.6 percent — yielding a better performance over the past five years.

Penn President Amy Gutmann attributed the growth to a combination of the high returns for the year, enduring fundraising success and the University’s sustainable spending practice. Last year, Penn’s 14.4 percent returns topped the Ivy League, followed by Brown with 12.6 percent returns. Gutmann also stressed the importance of long-term returns, citing that “no single year is a good measure.”

Penn’s three-year average return is 10.9 percent, while the average return since the 2004 fiscal year — when Gutmann arrived at Penn — has been 8 percent. Growth has been consistently positive aside from the 2009 fiscal year , when the endowment saw a 15.7 percent loss partially as a result of the EuroZone crisis.

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