Private equity investments are being placed on academic probation. Princeton University is scaling back the return expectations for its endowment fund, citing disappointing performance from its private capital investments. For the first time in a decade, Yale University has reduced its leveraged buyout portfolio. Harvard University indicated that early exits from certain private market investments are now part of a long-term strategy. Since the inception of the private equity industry, the wealthiest U.S. universities have been among its largest and most loyal clients. However, the market for investing in non-public companies has become increasingly crowded, and returns now struggle to match broader stock market benchmarks like the S&P 500. Endowment funds have grown more reliant on once-lucrative private equity returns to cover a larger portion of their overall budgets. According to Cambridge Associates, this strategy is faltering; over the three years ending June 30, these long-locked investments delivered only a 7.4% annualized return, much of which was paper gains. During the same period, the S&P 500 posted an annualized gain of 19.7%. Last month, Princeton lowered its endowment's expected return rate from 10.2% three years ago to 8%, with President Christopher Eisgruber identifying weaker private market performance as the primary factor. He suggested that the golden age of private equity may have come to an end.