UCSF Foundation Investment Company Update
By David Harkins, founding president and CIO
In fiscal year 2022 (FY 22), we saw an abrupt end to the euphoric bull market that started after the onset of the COVID-19 pandemic. After rising 33.2% in FY 21, the UCSF endowment returned -6.6% this fiscal year. On a longer-term basis, the endowment has compounded over 9% annually since FY 16. While we do not welcome a one-year loss, it is also not unexpected in a market where inflation worries, the war in Ukraine, and global supply chain pressures dominate headlines. A standard balanced portfolio of 80% stocks and 20% bonds fell 19% in 2022 so far and 13% for FY 22, so a modest -6.6% return is a relative win and a relief.
Generous donors, a rising market, and prudent portfolio management have contributed to a significant increase in support for UCSF’s mission of research, education, and patient care over the last decade. During this time, the endowment has compounded at 8% annually, and the payout to the University has more than quadrupled from $26 million to $116 million this year. This is an impressive outcome for the physicians, researchers, learners, and patients who benefit from UCSF’s lifesaving work.
UCSF Foundation Investment Company Board
The endowment is divided into two pools with one objective: protecting and growing the endowment to support UCSF’s mission. The UCSF Foundation Investment Company manages the Foundation Endowment Pool, which comprises 48 percent of the endowment. The other 52 percent is managed within the UC Regents General Endowment Pool. Each Pool has a long-term investment approach aimed at preserving purchasing power for successive generations while ensuring payout for the University’s immediate needs.
Investment Performance ending June 30, 2022
The following chart illustrates returns received and the benchmarks used to evaluate performance by the UCSF Foundation and the UC Regents.
The current gross payout rate for endowments for funds managed by the UC Regents is 4.75 percent of the 60-month trailing average of the endowment unit market value. For funds managed by the UCSF Foundation, the payment formula is 4.75 percent of the 36-month trailing average of the endowment unit market value.
Total UCSF Endowment
In the fiscal year ending June 30, 2022, the endowment totaled $5.44 billion, including internal campus transfers. Gifts received in June are invested in July and are not reflected in these totals.
Private Support by Designation
UCSF received a total of $767.6 million in gifts and grants in fiscal year 2022 for endowment, current use, and capital funds.
UCSF Endowment Payout Growth
Endowment payout grew in fiscal year 2022, providing a crucial source of funding for our mission of education, research, and clinical care. UCSF Foundation endowment payout includes income earned on UCSF Benioff Children’s Hospital Oakland investments in the UCSF Foundation investment pool.