An Early Bet on SpaceX Led to a 30% Gain for This College Endowment

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessAn Early Bet on SpaceX Led to a 30% Gain for This College EndowmentThe University of North Carolina’s endowment management company made an initial investment in SpaceX more than 15 years ago.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.SpaceX signage during the closing bell ceremony at the Nasdaq MarketSite in New York, on June 12. Photo by Michael Nagle /Photographer: Michael Nagle/Bloo(Bloomberg) — The University of North Carolina’s endowment management company made an initial investment in SpaceX more than 15 years ago.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountEarly wagers through venture capital in Elon Musk’s rocket company have helped turbocharge its endowment returns to more than 30% this year, according to a person familiar with the matter.It has helped make UNC’s endowment one of the best performing in the US, but it’s also emblematic of how a select group of US universities have profited from a surge in value from early-stage investments.Endowment funds with more than $500 million returned a median of 18.9% before fees in the year ended in June, according to Wilshire Trust Universe Comparison Service. The University of Michigan’s endowment, an early investor in OpenAI, is also expected to top the median.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“You either have those names that blew up in a big way or you don’t,” said Michael Rush, a Wilshire senior vice president.While endowment gains are the highest in the last 10 years except for 2021, the performances vary widely, according to Wilshire. SpaceX’s record-breaking initial public offering on June 12 is giving a big boost to funds that invested more than a decade ago. While SpaceX has a more than $1.5 trillion valuation, shares have fallen below the $135 a share IPO price, closing at $114.92 on Thursday. For universities that were invested in tech and energy, the strong returns could ease some of the financial strain from threats to their federal research funding, a shrinking pool of students and muted performance from private equity. Returns at large funds ranged between 14.5% to 20.5%, Wilshire data showed. All endowments returned a median before fees of 12.7% for the 12 months through June. Individual schools will report their performance starting over the coming weeks and months.University of North Carolina Management Co. had almost $15 billion under management as of March 31, of which the campus at Chapel Hill’s endowment accounts for almost half. The endowment gains will be shared across the state with the other schools in the UNC System and entities the nonprofit fund manages money for such as UNC Press and Winston-Salem State University.UNC’s endowment placed only a few million dollars in a fund that invested in SpaceX initially, and sold about $1 billion before the IPO, according to people familiar with the matter. The endowment still holds more than $1 billion in SpaceX. The school declined to comment. University endowments are investors with long time horizons, and venture capital investments like those in SpaceX can take decades to realize large gains, said Max Chapman, a former chair of the board of directors of Chapel Hill Investment Fund.“You make five or 10 investments and hope one of them will work,” said Chapman, who also attended the school as an undergraduate. “This one has worked very well.” This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Other schools are also expected to benefit from bets on Elon Musk’s rocket company.Duke University took an early position in SpaceX, according to people familiar with the matter. The endowment is valued at $12.3 billion as of June 2025, and the investment office manages about double that amount through other entities including the retirement plan and hospital.Washington University in St. Louis invested about $50 million almost a decade ago.Other Winning InvestmentsInvestments in artificial intelligence companies will also deliver outsized returns to some funds. The University of Michigan made an early bet on OpenAI with a $20 million initial investment. That was worth $2 billion in 2023, according to public documents. The ChatGPT maker is now valued at $852 billion and has filed confidentially for an IPO. Michigan declined to comment on this year’s performance. Cerebras Systems Inc., the chipmaker that raised $5.5 billion in its May IPO, will help boost returns of Kenyon College in Ohio and its roughly $700 million fund, according to vice president for finance Todd Burston. The school of 1,700 students made an investment more than a decade ago. Washington University — with $17 billion in assets, mostly its endowment — also invested in funds that held Cerebras.“They’re all going to be popping champagne at these mega IPOs,” said Philip Casey, an adviser to endowments and other institutional investors.Other winners this year will include endowments that stayed in oil and gas, despite pressure to divest. They benefited from the rise in energy prices, partially fueled by the war in Iran. While the S&P 500 returned 22% in the year ended in June, companies like ExxonMobil Holdings Corp. and Chevron Corp. contributed to stronger performance in the energy sector, which returned almost 30%. A wide dispersion in a year’s endowment returns rarely reflects single-year decisions, said Ted Karns, who spent 15 years at Princeton University’s endowment, where he co-led private equity and venture capital investing. “The gain is recognized in one year, but it was built over years,” said Karns, who teaches at Boston University’s Questrom School of Business. “And that concentration can then work in both directions.”Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.