ANN ARBOR—The University of Michigan’s investments rose to $7.8 billion in the fiscal year that ended June 30, up from $7.0 billion the previous year, mostly reflecting gains in the University’s endowment, according to the annual Report on Investments presented to the Board of Regents at its meeting today (Oct. 20) in Flint.

The endowment grew from $4.9 to $5.7 billion in one year, benefiting from a 16.3 percent investment return and strong donor donations, Regent Rebecca McGowan, chair of the Finance, Audit and Investment Committee, told the board.

” This report provides ongoing evidence that our long-term diversified approach continues to allow us to generate superior long-term returns by adding value in strong markets and limiting losses during challenging markets,” said Timothy Slottow, executive vice president and chief financial officer.

The endowment is the largest element of the University’s investment program. Valued at $5.7 billion, it is the 10th largest in the country and the 4th largest among public universities.

The endowment is invested primarily in a diversified set of equity-oriented investments including common stocks, absolute return strategies, real estate, venture capital, private equity, and energy assets.

The endowment’s investment mix has grown more complex over time as markets have become more specialized, and the University’s larger pool of capital has permitted greater diversification and the implementation of more sophisticated strategies. ” These trends are expected to continue,” Slottow said.

Erik Lundberg, chief investment officer, said last year’s performance was high by historical standards and was driven by broad investment gains in many parts of the portfolio as many investments responded favorably to strong global economic growth and a relatively low interest rate environment.