Nonprofit health care saw 13.2% return on investments in 2017

Nonprofit health care organizations reported an average return of 13.2% net-of-fees on investable assets during 2017 compared to 6.2% on average for 2016.

According to the Commonfund Institute, the 56 funds surveyed reported an average investable asset pool of $2.1 billion as of December 31, 2017, and median investable assets of $987 million. Investable assets include endowment/foundation funds, funded depreciation, working capital and other separately treated assets.

The health-related funds averaged 5.9% returns for the trailing three-year period ending December 30, 2017 and 6.9% for the trailing five-year period. The 10-year period was the least at 4.6%. The benchmark is the consumer price index plus 5%, according to Commonfund Institute.

Allocations in 2017 to U.S. equities and fixed income were more than they were in 2015 but remain well below the upper 30%/lower 40% level reported when the study commenced for 2002.

At year-end 2017, 57% of participating institutions’ U.S. equities allocation was actively managed and 43% was passively managed - a clear change since 2014 when the active/passive split was 65/35, according to Commonfund Institute.