The University of North Carolina's endowment returned more than 30% in the fiscal year through June, and a large portion of that gain came from a SpaceX investment made years before the company went public. Endowments like UNC's exist to fund university operations — scholarships, faculty salaries, and programs — which is why their investment results matter well beyond the finance office.

Before the listing, the SpaceX position had grown to roughly 10% of the nearly $15 billion managed by UNC Management Company. UNC first gained exposure to SpaceX around the time of the global financial crisis.

As that long-held investment now pays off, several other large US university funds are also finally seeing strong gains from private technology companies — and this is not happening at UNC alone. A number of major university endowments could end up matching or even beating the broader US stock market after years of trailing it.

Cambridge Associates says some of them could "significantly outperform" the S&P 500, which gained more than 20% in the 12 months through June 30. Margaret Chen, who heads the firm's global endowment and foundation practice, said the biggest boost came from "a small number of very successful private companies." She also expects the median return across the sector to be "very strong."

Some universities bought these stakes directly, while others gained exposure through private-equity managers. Many final results remain undisclosed because private investments take longer to value than shares that trade daily on the public market.

SpaceX and AI Bets Help University Endowments Break Out of Years of Weak Private-Market Returns

Margaret Chen summed up the year plainly: "It is shaping up to be a standout year for institutions with exposure to a few major private-market winners," she said.

Outperforming broad indexes is difficult even for the most active stock pickers; most fail to do so consistently over an extended period. Large university endowments, however, took a different path. After the 2008 financial crisis, many of these institutions invested heavily in private equity, dramatically increasing their holdings of non-publicly traded assets.

That positioning worked against them in recent years. Private-company valuations fell after the 2021 boom and recovered far more slowly than public stocks. There were also fewer IPOs and fewer corporate buyouts, leaving investment firms with fewer opportunities to sell holdings and return money to their investors.

The resulting gap was substantial. University endowments with more than $5 billion in assets returned an annualized 7.8% over the three years through June 2025, according to research from the National Association of College and University Business Officers and Commonfund. Over the same period, the S&P 500 returned an annualized 19.7%.

The University of Colorado Foundation saw a similar outcome. The $3.5 billion portfolio managed by the foundation delivered a 20.3% return in the year to June, just below the S&P 500 index. That result can be credited in large part to SpaceX, which the state invested in starting in 2009.

UNC Kept Investing in SpaceX Even After Holden Thorp Considered the Rocket Bet Too Risky

UNC gained access to SpaceX through Founders Fund, the venture-capital firm Peter Thiel started in 2005. UNC Management was one of the fund's early investors. A few years later, Founders Fund began investing in Elon Musk's rocket company. Then, around 2009 or 2010, Founders Fund returned to UNC Management and asked it to commit even more university money to SpaceX.

Holden Thorp, who was UNC-Chapel Hill's chancellor at the time, was firmly opposed. "Are you guys nuts?" he recalled telling the investment team.

At the time, Thorp considered building rockets a very risky use of venture money. His concern was cost: rockets are expensive to build, and he was not convinced SpaceX could raise enough cash to keep producing them.

"There's a saying in venture capital, or there was at the time, that you never wanted to invest in bending metal," Thorp said. "You wanted to invest in ideas and technologies that were cheap to do, and that would have outsized returns."

UNC Management went ahead anyway. Thorp now says he was wrong and is glad the investment team ignored him. He also said the episode is a good example of why university administrators probably should not be the ones making investment decisions for endowments — one reason most large endowments delegate day-to-day investing to professional staff like UNC Management Company rather than to campus leadership.

Thorp credited Jonathon King and Kevin Tunick for UNC's SpaceX position. King ran the investment operation for more than 20 years before retiring in 2025, and Tunick handled the fund's private investments for nearly 15 years before retiring in 2023.