The University’s endowment investments declined for a second consecutive year, according to the Princeton University Investment Co. (Princo), which reported a 1.7% loss in 2022-23 and a total endowment value of $34.1 billion at the start of the new fiscal year in July.
Princeton also announced that Vincent Tuohey, an investment director at the Massachusetts Institute of Technology Investment Management Company, will be Princo’s next president, succeeding longtime head Andrew Golden, who will retire in June 2024.
Tuohey, a Harvard alumnus, has worked on MIT’s investment team since 2010. Prior to his career as an investor, he served in the U.S. Army from 2002 to 2006 and earned a Bronze Star while deployed to Iraq. “Vince Tuohey combines outstanding investment acumen and experience with proven leadership ability,” President Christopher Eisgruber ’83 said in a University release. “He also has a deep appreciation for Princeton’s mission and the special achievements of Andy Golden and the superb team at Princo.”
Golden told PAW that his goal today is the same as it was when he joined Princo in 1995: to position the endowment for success over the next quarter century. “I’m privileged to be able to help welcome a successor into this office and do whatever I can to make that transition smooth,” he said.
Despite the Princo portfolio’s relatively poor overall results in the fiscal year, Golden said that when his team looked back at decisions it made, there was not much it would have done differently. Several categories, such as developed markets, emerging markets, and independent returns, reported gains for the year.
“The key driver of the weak results was a very large venture capital portfolio, and if you look across other schools, the relative performance ranking maps, for this year, almost perfectly negatively correlated with how much venture capital you had,” Golden said. “Interestingly, if you look at performance over the past 10 years, and certainly the past 20 years, it’s the exact opposite.”
Princo’s average annual return for the past 20 years is 10.5%, and one recent year of extraordinary venture capital gains (a 98.7% return for the category in 2020-21) helped the University add more than $11 billion to the endowment, pushing its value to $37.7 billion in July 2021. Since then, with regular operating budget spending and investment losses, including a 1.5% loss in 2021-22, the endowment’s value has decreased by about $3.6 billion.
Around the Ivy League and at other leading private institutions, 2022-23 returns were modest but mostly positive, with Columbia (4.7%) at the top of the list. Several schools, including Harvard and Yale, saw the overall value of their endowments decline as the amount spent during the year was greater than the investment gains. MIT reported a 2.9% investment loss.
In September 2022, Princeton’s trustees decided to eliminate all University holdings in publicly traded fossil-fuel companies, and Golden confirmed that Princo has completed that process. He acknowledged an opportunity cost associated with the change, but added, “If the University community says that this is a moral obligation that we have, we should do it, even if it costs money. … In other words, our principles should not be for sale.”