UNC endowment returns more than 30% as early SpaceX bet turns into a massive winner

The University of North Carolina endowment made more than 30% in the year through June, and a huge part of that came from a SpaceX investment it made years before the company went public.

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

Now that the old investment is paying off, at the same time, several other big US university funds are finally seeing strong gains from private tech companies.

And this is not just happening at UNC. A few major university endowments could end up matching or even beating the wider US stock market after years of falling behind 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.”

Margaret also expects the median return across the sector to be “very strong.” Some universities bought these stakes directly. Others got them through private-equity managers. A lot of final results are still not public because private investments simply take longer to value than shares trading every day on the stock market.

SpaceX and AI bets help university endowments finally break out of years of weak private-market returns

Margaret summed up the year pretty clearly. “It is shaping up to be a standout year for institutions with exposure to a few major private-market winners,” she said.

Outperforming any of these broad indexes is difficult for even the most active stock pickers. Most fail to achieve this task consistently over an extended period of time. However, the large university endowments have not followed this path.

After the financial crisis of 2008, many of these institutions invested significantly in private equity, meaning that their holdings in non-publicly traded assets increased dramatically.

That worked against them in recent years. Private-company valuations fell after the 2021 boom, and they were much slower to bounce back than public stocks. There were also fewer IPOs and fewer company buyouts. That gave investment firms fewer chances to sell holdings and send money back to their investors.

The gap became pretty big. 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 something similar happen as well. The $3.5 billion portfolio managed by the university foundation delivered 20.3% returns in the year to June, just below that of the S&P 500 index. This can be credited in large part to SpaceX, which the state invested in from 2009.

UNC kept putting money into SpaceX even after Holden Thorp thought the rocket bet looked far too risky

UNC got into 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 putting money into Elon Musk’s rocket company.

Then, around 2009 or 2010, Founders Fund came back to UNC Management and asked it to put even more university money into SpaceX. Holden Thorp, who was UNC-Chapel Hill’s chancellor at the time, was completely against it.

“Are you guys nuts?” Holden recalled telling the investment team.

At the time, Holden thought building rockets was a very risky place to put venture money. His problem was the cost. Rockets are expensive to make, and he was not convinced SpaceX would be able to raise enough cash to keep building them.

“There’s a saying in venture capital, or there was at the time, that you never wanted to invest in bending metal,” Holden 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. Holden now says he was wrong and is glad the investment team ignored him. He also said the whole thing is a pretty good example of why university administrators probably should not be the ones making investment calls for endowments.

Holden said Jonathon King and Kevin Tunick deserve the credit for UNC’s SpaceX position. Jonathon ran the investment operation for more than 20 years before retiring in 2025. Kevin handled the fund’s private investments for almost 15 years before retiring in 2023.