The University of Michigan’s long-term investment portfolio, which consists mostly of the endowment, grew 2.2% in the last fiscal year.

The portfolio’s performance was among the highest for large university endowments, with most reporting losses for 2022 fiscal year, said Chief Investment Officer Erik Lundberg. The average return for a college and university endowment was -6.5% last year according to Cambridge Associates, an investment consulting firm that serves colleges, universities and large institutional investors.

The university’s endowment climbed $325 million during the 2022 fiscal year to a market value of $17.3 billion as of June 30.

The university’s long-term investment portfolio has a 20-year annualized return of 9.9%. That performance compares to the median 20-year annualized return of 7.4% among college and university endowments.

The 2.2% return over the last fiscal year comes one year after university endowments across the country experienced explosive growth, with gains at U-M topping 40%.

“Our investments in renewable fuel and sustainable energy contributed significantly to the positive performance last year, along with other investments that responded well to inflation,” said Lundberg, who will share a detailed endowment presentation at the Board of Regents meeting Dec. 8.

The endowment is a collection of more than 12,400 separate endowment funds, which provide support that is restricted for specific purposes such as educational programs, research and professorships.

Endowment distributions of $434 million for the 2022 fiscal year that ended June 30 supported a variety of university functions, from student scholarships to clinical care. The annual distributions—funds available for university units to spend—have increased each year since 2000 and totaled about $5.9 billion over that period.

On a per-student basis, U-M’s endowment is ranked 86th among all U.S. universities, according to a recent report from the National Association of College and University Business Officers. Unlike several private school peers that have similarly sized or larger endowments, U-M supports a much larger student body and campus community.

“Thanks to exemplary management from Erik Lundberg and our investment team, our endowment continues to provide the University of Michigan with a reliable source of revenue for its operations,” said Geoffrey Chatas, executive vice president and chief financial officer. “We’re more than satisfied with the portfolio’s continued strong performance.”