BOSTON (Reuters) - Harvard's endowment fund, the world's largest university endowment, grew to $53.2 billion in fiscal 2024 amid strong investment returns even though endowment gifts shrank by a third as donors protested how the school handled antisemitism on campus.

Harvard Management Co said on Thursday that it earned a 9.6% return in the fiscal year that ended June 30. The return topped the school's long-term target of 8%, according to its annual report.

A year earlier, the endowment earned a 2.9% return and stood at $50.7 billion.

The school allocated 39% of its assets to private equity and 32% to hedge funds, and both portfolios "stood out for their strong performance," Harvard Management's chief executive, N.P. "Narv" Narvekar, wrote in a letter. The school invested 14% in public equities.

Returns from Ivy League schools like Harvard are watched closely because they pioneered putting money into hedge funds and private equity funds. They are being watched even more this year amid campus turmoil over how schools reacted to rising antisemitism and anti-Muslim sentiment after the Oct. 7, 2023, Hamas attack on Israel.

Several university presidents, including Harvard's Claudine Gay, resigned amid mounting criticism from students, faculty and alumni, including big-name donors.

Columbia University reported an 11.5% return while Brown University posted an 11.3% gain in the 2024 fiscal year.

The returns for those Ivy League endowments pale, however, compared with the performance of the S&P 500 stock index, which rose by 22.7% in the 12 months ended June 30, 2024.

Narvekar said Harvard's tolerance for risky investments has been lower than other private schools, but noted that Harvard had approved a moderate increase in risk tolerance in 2021, which has helped returns. "Conversations with the University remain active to determine if future increases to risk tolerance are warranted," he added.

The endowment distributed $2.4 billion toward the school's operating budget, including financial aid, faculty salaries and research initiatives.

The strong returns came despite a drop in endowment gifts to $368 million compared with $561 million in the previous year. But Harvard said current use gifts rose by 9% to $528 million. A number of prominent donors, including hedge fund manager Kenneth Griffin, halted their giving amid the crisis.

"As the university addressed long-standing challenges that were highlighted by the events of the past year, alumni and others demonstrated both their concern and their care for the future of the institution through growing levels of support over the course of the year," Harvard President Alan Garber wrote.