Uni-corns

Billions on the balance sheet, thousands of customers paying tens of thousands to a subscription-like model annually, zero tax obligations. Where do I invest?

US universities are some of the most efficient money-generating machines around. While they operate under a ‘not-for-profit’ label, and comparing universities to listed companies is not realistic, it does show the sheer wealth of the sandstone institutions.

Unsurprisingly, Harvard has the biggest balance sheet (endowment) of any institute. US$40b sits in their endowment fund. In 2019, before the pandemic affected operations, the college did US$5.5b in revenue, 35% of which was generated from returns on the endowment. This revenue is greater than companies like Western Union, Hilton Hotels, and Harley Davidson generate. Their balance sheet assets sit just short of McDonalds, and Hewlett Packard while eclipsing Mastercard.

Yale, Stanford, Princeton, and MIT unsurprisingly round out the top 5. The King Abdullah University in Saudi Arabia holds a US$20b in its endowment fund, the largest of any non-US university. The institution only has ~1000 postgraduate students enrolled and is the first mixed-gender university in the country.