Ivy League schools reconsider private equity investments.

Private equity investments are currently under the scrutiny of academia. Princeton University has lowered its expectations for returns on endowment funds due to disappointing private capital investment performance. Yale University has for the first time in a decade reduced its leveraged buyout investment portfolio. Harvard University has stated that exiting some private market investments early has now become a part of their long-term strategy. Since the formation of the private equity industry, the wealthiest universities in the United States have been its largest and most loyal clients. However, the market for investing in non-public companies has become more crowded, and now its returns are struggling to match more widespread stock market benchmarks like the S&P 500 index. University endowment funds have increasingly relied on once lucrative private equity returns to cover a larger portion of their total budget. According to data from Cambridge Associates, this strategy has been challenging, with these long-term locked-in investments only achieving an annualized return of 7.4% in the three years ending June 30, most of which were unrealized gains. During the same period, the S&P 500 index had an annualized growth rate of 19.7%. Princeton University lowered its endowment fund's expected return rate from 10.2% three years ago to 8% last month, with the university president Christopher Eisgruber attributing the decline in performance in the private market as the primary factor. He suggested that the golden age of private equity may have come to an end.