When we care deeply about something, when we know the world is better because of it, we take steps to ensure it thrives. An endowment preserves what we value while creating opportunities for growth and impact. At Lehigh, the endowment is not just the financial lifeblood; it reflects the values, memories, relationships, and aspirations that unite us. By building our endowment, we secure a bright future for generations of Lehigh students. While public discourse has scrutinized the role of higher education, Lehigh has never stood on firmer footing. The admissions office has received a record-breaking number of applications for two consecutive years. Your support has been instrumental in allowing Lehigh to admit the best students, regardless of their financial circumstances. In fiscal year 2024, more than 50% of undergraduates received financial aid and felt the pride of being awarded an endowed scholarship. This fall, the new Lehigh Commitment was launched to provide a full tuition grant to undergraduate students from families with a total income of less than $75,000. Expanding access to talented students strengthens the Lehigh community and enriches the experience for all. As key initiatives take shape around the university’s ambition and clear sense of purpose, momentum is building in every corner of campus. The implementation of Inspiring the Future Makers, Lehigh’s bold strategy, is well underway, and GO Beyond: The Campaign for Future Makers is achieving impressive results, having surpassed $918M toward our $1.25B fundraising goal. In these pages, you’ll learn more about the campaign, Lehigh’s endowment, and the farreaching impact of your support. As the outgoing chair of the Tower Society, it has been my privilege to work with you in service of Lehigh. I’m excited to pass the baton to the next generation of philanthropists as Kevin Clayton ’84 ’13P assumes the role of Tower Society chair. And while my role is changing, I remain committed to standing with you as we shape Lehigh’s future together. Thank you for your partnership in this journey and your unwavering commitment to this special place. With warmest regards, Mike Caruso ’67 Chair, Tower Society Cover: Students engage in rapid prototyping during Lehigh’s Hatchery program. The Baker Institute’s student idea accelerator is a six-week summer intensive designed to spark creativity, foster innovation, and ignite a passion for entrepreneurship. In fiscal year 2024, the endowment increased by 10.5%, net of all fees and expenses, leading to an ending value of $2.2 billion endowment and total assets under management. The strong one-year performance was largely due to the public equity markets’ returns. There were no major asset allocation changes, and our diversifying asset classes, absolute return and treasuries, have continued to generate solid absolute performance. For the year, public equity was the best-performing asset class, returning 20.7%, due to mega-cap and high-growth technology companies driving the returns of broad market indices. We also saw strong public market performance from our sector specialist managers. The absolute return portfolio was another bright spot, generating an 8.5% return and providing significant diversification benefits. The private equity portfolio underperformed long-term return expectations as venture capital continued to deal with a tough fundraising environment and lower valuations. However, buyout and growth equity strategies performed in line with expectations. The treasury portfolio performed well given our decision to shorten overall duration and capture an attractive yield opportunity as short-term treasury rates were higher than 5% for most of the fiscal year. The real estate portfolio outperformed its benchmark but was negative for the year, as the asset class continues to feel the impact of rising interest rates and major shifts in real estate supply-demand dynamics. Most important is the continued strength in our long-term absolute and relative performance. The long-term portfolio has returned 9.4% over five years and 7.8% over 10 years, net of all fees and expenses. Not only have these returns eclipsed our absolute return target, but they have also outperformed relative benchmarks, such as a “60/40” portfolio. It is also notable that due to growth in the long-term portfolio, the annual payout to the university will be over $100 million for fiscal year 2025. As we enter fiscal year 2025, we remain vigilant of the current market environment. The endowment retains its flexibility with an appropriate cash balance and by monitoring potential opportunities to take advantage of declining rates and market volatility. Thank you for your ongoing support of the Lehigh endowment and the very important role it plays in advancing Lehigh’s strategic priorities and programs. Kristin Agatone Chief Investment Officer 3
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