The Ivy League universities have released their endowment returns for the 2014 fiscal year, with Yale besting rivals Harvard and Dartmouth.

Harvard remains the world’s wealthiest university, possessing the largest school endowment at over $34 billion. Yale’s endowment grew to $23.9 billion as of June 30, from $20.8 billion the previous year. A press release detailed double-digit returns in private equity, domestic and foreign stocks, and real estate, as well as 9 percent returns on hedge fund investments.

Harvard And Yale Release Endowment Returns

Endowment diversity

Yale stated that it would hold 20 percent of its portfolio in hedge funds and 31 percent in private equity during 2015, with the rest consisting of real estate and equities.

Meanwhile Harvard increased its commitment to alternative investments in hedge funds, private equity and real estate. A letter written by Harvard endowment chief Jane Mendillo gave the green light to increase allocations to private equity and hedge funds from 31% to 34% of assets in the fiscal year 2015.

A different strategy

Harvard’s commitment to hedge funds comes at a time when other investors are moving away from them. Just last week the biggest pension fund in the U.S., the California Public Employees’ Retirement System, announced that it was fully retreating from hedge funds to cut costs and simplify holdings.

Since the financial crisis Harvard’s performance has been less impressive than that of its peers, and its endowment is still short of its pre-crisis peak of $36.9 billion, set in June 2008.

The economic downturn has led analysts to question the strategy of investing in alternative stakes, because of sharp losses experienced by endowments that had increased exposure to such investments.

The Harvard endowment model has come in for criticism from alumni who have criticized the endowment’s executive compensation, as well as the “hybrid” investment model which relies on internal and external managers.

The board has defended the strategy, which they claim has led to annual gains of 8.9% over the last 10 years, above the target rate of 7%.

Despite its defense of the current strategy, the endowment is currently searching for a new chief executive. Jane Mendillo has taken the decision to leave at the end of this year.