Fifty-six nonprofit healthcare organizations reported a return on investable assets of 13.2 percent for 2017, up from the average 6.2 percent return reported for 2016, according to a Commonfund study for both years.
The finding marks the highest return since 2013, when healthcare organizations reported a return of 13.3 percent.
For the study, Commonfund used an online survey tool to examine financial data for 56 nonprofit healthcare organizations with investable assets of $100 million and more.
Returns were reported net of fees, and researchers considered "investable assets" to include endowment/foundation funds, funded depreciation, working capital and other separately treated assets.
Here are six other findings:
1. The long-term average annual return on investable assets was 4.6 percent for 2008-2017. Commonfund said the greatest shifts in asset allocation over the last five years were in fixed income and alternative strategies.
2. Investable assets allocation to alternative strategies, such as hedge funds, was 25 percent for 2017. That's down from 28 percent reported by organizations that participated in Commonfund's study for 2015.
3. Allocations to U.S. equities were 21 percent for 2017, according to the study. That's slightly higher than the 19 percent reported for 2016. Allocations to fixed income remained unchanged between 2016 and 2017, at 31 percent.
4. Organizations participating in the study for 2016 and 2017 reported an average investable asset pool of $2.1 billion and median investable assets of $987 million as of Dec. 31, 2017.
5. The 32 organizations that reported defined benefit plan market value for 2016 and 2017 reported an average plan value of $2 billion as of Dec. 31, 2017. Those organizations reported a median market value of $481 million as of that same date.
6. As of Dec. 31, 2017, 57 percent of the 56 organizations participating in the study for 2016 and 2017 reported their U.S. equities allocation was actively managed, and 43 percent said theirs was passively managed.
Read more about the study here.
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