911±¬ÁÏÍø endowment provided EUR 37 million in 2023 to education and research
The endowment provided EUR 37 million to university operations in 2023, contributing approx. 9% to the total funding of the university. This funding continues to secure high-quality education and research activities to compensate for the long-term erosion of the university public funding base. Spending from the general endowment fund was EUR 29 million, from the restricted funds EUR 6 million and unrestricted funds EUR 2 million. Spending from the general endowment fund is guided by a spending policy, where the level of annual spending averages 2.5% per year and is based on the long term expected real return of the endowment portfolio, thus helping to preserve the real value of fund over time.
At the end of the year, endowment total value was 1382 million euro, comprising of 1364 million euro endowment portfolio and 19 million euro in endowment cash. Endowment cash contains the assets of the expendable funds which can be used in the short term and hence are not invested in the endowment portfolio.
Endowment investment portfolio return in 2023 was 8.1% after all fees and costs. At the end of the year, the average return of the portfolio since inception in 2010 was 5.4% per annum. Endowment investment portfolio returns over 3- and 5-year periods are 7.3% and 8.2% per annum respectively.
Year 2023 was volatile but ultimately positive year in the financial markets. Easing of inflationary pressures together with better-than-expected growth allowed markets to recover from the declines seen the previous year. While returns were positive across most asset classes, correlation between major asset classes remained elevated, resulting in continued challenge in diversifying many traditional portfolios.
All risk asset classes in the endowment portfolio saw positive returns with equity risk dominating the return contribution. Investments in credit and alternative risk continue to provide valuable diversification. Investment in public markets, both equity and credit, showed higher returns than their private market counterparts. This was an expected reversion of the pattern seen the previous year.
Implementation of sustainable investing policy continued during the year. Carbon intensity of listed equities was reduced further and stands at 50% below global benchmark in line with policy goals. The carbon intensity and other key sustainability metrics are reported in our endowment sustainability report.
| Allocation 31.12.2023 | Return 2023 | Annual return since inception (05/2010) | |
| Risk free | 2.5% | 2.7% | 1.0% |
| Interest rate risk | 4.5% | 6.1% | 0.9% |
| Credit risk | 15.4% | 4.8% | 4.2% |
| Equity risk | 59.6% | 11.5% | 8.6% |
| Alternative risk | 18.1% | 2.2% | 2.1% |
| Aalto endowment portfolio | 100.0% | 8.1% | 5.4% |
Read more:
911±¬ÁÏÍø endowmentEndowment Spending PolicyEndowment sustainability Report 2023
911±¬ÁÏÍø was recognised in national and international evaluations in 2023
Contact information:
Chief Financial Officer Marianna Bom
+358 50 599 0906, marianna.bom@aalto.fi
Head of Investments Iivo Paukkeri
+358 50 599 0906, iivo.paukkeri@aalto.fi
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