NEPC Principal Colin Hatton was quoted in this recent FundFire article examining how market volatility, active management, and AI exposure shaped endowment performance in 2025. Visit FundFire to read the full analysis and insights from NEPC’s latest endowment report.
Market volatility vastly impacted 2025 endowment performance, narrowing the gap between smaller and larger endowment returns and giving a boost to portfolios with actively managed funds.
The University of Wisconsin-Madison came out on top with a whopping 16.2% return for its $4.9 billion endowment, according to NEPC‘s most recent report on endowments.
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“For those that had strong performance, active management certainly added to returns, but that was not the case across the board,” said Colin Hatton, principal on NEPC’s endowments and foundations team. “There was a large dispersion amongst manager returns across public and private equity markets.”
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Lower middle-market buyouts and growth equity/venture had certain funds with very strong returns, he said. And venture capital returns got a boost from some of the early artificial intelligence winners that had significantly higher valuations, Hatton added.
Publicly traded AI-related stocks also fueled gains for the top-performing funds, according to the report.
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“We think this is going to be a trend with more institutions using the secondary market as a portfolio management tool,” Hatton said. “2025 saw overall [limited partner] secondary transactions increase to all-time highs. In some cases, it will be to rebalance towards targets, in others, it may be based on broader portfolio management considerations and expectations on… forward looking returns from their capital.”