The University of California’s $13.1 billion endowment produced better investment returns last year but still trailed most of the other richest colleges in the country, new financial data shows.

In 2014, the investment payout for the UC system topped 17 percent, according to an analysis of data from UC’s Office of the President by Reveal from The Center for Investigative Reporting.

That was a five-point gain over 2013 and UC’s second-best year in a decade. But in a year when the stock market boomed, the nine other colleges with the nation’s largest endowments also showed big gains.

Of the top 10, UC ranked seventh; it was outperformed by five private colleges, including top earner Yale, which reported returns of more than 20 percent, and one public university, the University of Michigan, which earned nearly 19 percent. UC did better than three colleges, including Stanford and Harvard.

The average return for the richest universities was almost 18 percent, half a point higher than UC’s earnings.

The issue of UC’s investment performance is important because improved earnings could help offset huge budget cuts imposed on the 10-campus public university system by the state Legislature. The cuts, which UC says amounted to $900 million between 2008 and 2012, led to steep hikes in student fees and thousands of layoffs.

Meanwhile, as CIR reported last year, UC’s investment performance has regularly lagged behind the other U.S. universities with multibillion-dollar endowments.

In 2008, 2009 and 2012, UC investments actually lost money, records show. Over the past decade, even with improved performance in 2013 and 2014, UC ranked dead last among the 10 universities with the biggest endowments. Better performance over the decade might have added as much as $3 billion to UC’s endowment, experts say.

“Clearly, over the long term we have been a laggard,” said Chief Investment Officer Jagdeep Singh Bachher, who was hired last year to manage about $7.4 billion in endowment funds for UC’s Office of the President.

But Bachher said the trend line is positive: Earnings “have improved, especially in the last year, and they look better over (the past) three-year period.”

Over the years, UC officials have contended that the endowment was performing as well as possible under tough circumstances. Last year, then-Chief Financial Officer Peter Taylor told CIR that UC took a conservative investment approach because it is a public institution. Inevitably, that depressed returns, he said.

UC also argued it lost out on potential big payouts because it had been barred from some lucrative venture capital funds; fund managers feared that the university would be forced to disclose proprietary information under terms of state public records laws, UC said.

Members of UC’s governing Board of Regents didn’t express concern about the endowment, but criticism has sometimes flared.

In 2013, Oakland financier T. Gary Rogers, a longtime UC benefactor and member of a UC advisory board, complained publicly about what he called the endowment’s “absolutely bottom-of-the-heap performance year in and year out.”

Last year, longtime UC Chief Investment Officer Marie Berggren retired. She was replaced by Bachher, an investment professional from Canada. His office’s portion of the endowment reported a 19 percent return last year. The rest, managed by investment officers on UC campuses, earned about 15.5 percent, records show.

The University of California’s endowment, built over the years with contributions from alumni, foundations and corporations, ranks eighth in size among American colleges. It’s held in a mix of stocks, real estate and other investments. Investment decisions are made by financial professionals, including more than 200 outside money managers.

Earnings from the endowment’s investments are spent on university needs. UC spends no more than 5 percent of the endowment’s total value each year. Any earnings above that are reinvested.

Lance Williams is a senior reporter for Reveal, focusing on money and politics. He has twice won journalism’s George Polk Award – for medical reporting while at The Center for Investigative Reporting, and for coverage of the BALCO sports steroid scandal while at the San Francisco Chronicle. With partner Mark Fainaru-Wada, Williams wrote the national bestseller “Game of Shadows: Barry Bonds, BALCO, and the Steroids Scandal that Rocked Professional Sports.” In 2006, the reporting duo was held in contempt of court and threatened with 18 months in federal prison for refusing to testify about their confidential sources on the BALCO investigation. The subpoenas were later withdrawn. Williams’ reporting also has been honored with the White House Correspondents’ Association’s Edgar A. Poe Award; the Gerald Loeb Award for financial reporting; and the Scripps Howard Foundation’s Award for Distinguished Service to the First Amendment. He graduated from Brown University and UC Berkeley. He also worked at the San Francisco Examiner, the Oakland Tribune and the Daily Review in Hayward, California. Williams is based in Reveal's Emeryville, California, office.