Cornell's investments surged 12.6 percent in the fiscal year that ended June 30, according to the Office of University Investments.

The strong return was thanks to asset allocation and good manager selection, said Joanne DeStefano, vice president for finance and chief financial officer. The fund's long-term investments were valued at $4.4 billion as of June 30.

The positive performance follows a 26 percent decline in the previous year, in the wake of the 2008 financial crisis.

The university made a slight change in asset allocation during fiscal year (FY) 2010, which runs from July 1, 2009, to June 30, 2010, DeStefano said. "We decreased exposure to credit and distressed assets after increasing the allocation in FY 2009. Both credit and distressed assets performed well following the credit crisis of 2008 and contributed to the strong performance realized during fiscal 2010."

The university took advantage of low interest rates in FY 2010 by refinancing $250 million of variable rate debt for fixed rate debt, DeStefano said. "In addition, we borrowed $285 million for construction of our medical research building at Weill Cornell Medical College in New York City, per our capital plan. There are no plans for any debt in this current fiscal year."

Over the past three fiscal years, Cornell earned an average annual return of -5.1 percent; over the past five fiscal years, it generated an average annual return of 4.6 percent. Those returns beat the 75 percent/25 percent equity/bonds benchmark during both time periods, the Office of University Investments said.

The returns have been folded back into the long-term investment pool and will be spent according to university policies, DeStefano said.

Cornell's returns beat those of Yale, Dartmouth, Brown and Harvard universities, according to recent Bloomberg reports. Yale's $16.7 billion endowment earned 8.9 percent in the past year, while Dartmouth's $3 billion endowment and Brown's $2.8 billion endowment both gained 10 percent. Harvard said its $27.4 billion endowment climbed 11 percent, Bloomberg reported.

Among the Ivy League schools, only the University of Pennsylvania and Columbia fared better. Penn's $5.7 billion endowment increased 13 percent. Columbia reported the best performance, with a 17 percent rise in its $6.5 billion endowment, according to Bloomberg. Princeton University has not yet reported its investment results.

The university's investment office is being managed temporarily by A.J. Edwards, David McNiff and John Regan, all senior investment officers in the Office of University Investments. A search is ongoing to replace former Chief Investment Officer James Walsh, who stepped down from his post in June, DeStefano said.