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Credit: Nicholas Fernandez

Penn’s endowment posted a record 41.1% return in fiscal year 2021, according to the Office of Investments.

As of June 30, the University’s endowment assets valued $20.5 billion, an increase of $5.6 billion from the previous year, Bloomberg reported. While $15.6 billion of the endowment represents assets that support the University, $4.9 billion represented assets that support the University Health System.

The Office of Investments attributed the endowment’s growth to the impact of investment returns, spending distributions, new gifts, and internal transfers.

This year’s record return marks a shift in the downward trend in return rates since fiscal year 2017. Fiscal year 2020 had a 3.4% return rate.

Colleges across the nation are benefiting from record high stock markets and gains in private equity. Vanderbilt University reported a 57.1% return and Duke University reported a 56% return on their endowments this year, according to Bloomberg. Endowments nationwide reported a median annual return of 27% during the past year, the best performance in 35 years. 

According to the Office of Investments, the endowment comprises over 8,000 funds that support the University’s schools, centers, and health system. Each year, the endowment distributes funds to support a wide range of University activities, including instruction and student financial aid. 

The target payout rate is 5% of each endowment fund, but this year the target was increased to 7% to reflect the unique needs and opportunities presented by the COVID-19 pandemic, according to the Office of Investments. Distributions from the endowment provided $797 million to support the University budget this year, an increase of almost $150 million from fiscal year 2020.