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UVA’s AI Hedge Fund Bet Powered Record Returns Before Tumult
The University of Virginia invested some of its money in a young hedge fund focused on artificial intelligence.
The fund was started by 24-year-old Leopold Aschenbrenner.
Its investments rose very quickly, helping UVA have a strong year.
UVA’s investments gained 27% over the year ending June 30.
The university’s assets reached a record $18.8 billion.
But the fund borrowed money to make its gains larger, which also increased its risks.
When technology stocks fell in July, the fund had to sell many stocks to answer lenders’ demands.
Aschenbrenner later told clients that he had stopped using borrowed money for now.
The University of Virginia invested in AI-focused hedge fund Situational Awareness last year.
Situational Awareness gained 200% in 2025 and more than 400% during the first half of this year.
UVA’s long-term investments returned 27% in the fiscal year ending June 30, lifting assets to a record $18.8 billion.
Margin calls during July’s technology selloff forced Situational Awareness to sell much of its public-stock portfolio.
Many institutions avoided the fund because founder Leopold Aschenbrenner had limited investing experience and a small staff.
- Who
- The University of Virginia Investment Management Co., Situational Awareness, and its founder Leopold Aschenbrenner.
- What
- UVA invested in Situational Awareness, whose strong gains contributed to a 27% return for UVA’s long-term investments before the hedge fund’s July collapse.
- Where
- The investment involved the University of Virginia and a hedge fund operating in the technology and artificial-intelligence investment sector.
- When
- UVA’s reported fiscal year ended June 30; the hedge fund’s major selloff occurred in July.
- Why
- UVA saw the fund as an opportunity to benefit from artificial-intelligence and technology gains after previously lagging market benchmarks.
Investment rationale
Risk concerns
Why UVA invested
Investment rationale
Situational Awareness offered exposure to artificial intelligence and technology, areas that could help UVA catch up after lagging market benchmarks.
Risk concerns
The fund was led by a 24-year-old founder with limited investing experience and a small staff, factors that caused many institutions to avoid it.
Use of borrowed money
Investment rationale
Leverage helped the fund generate exceptionally high returns before the July selloff and contributed to UVA’s strong fiscal-year performance.
Risk concerns
Borrowing increased the fund’s vulnerability, and margin calls forced it to sell a substantial portion of its publicly traded stocks during the technology downturn.
Future prospects
Investment rationale
The fund was still up around 80% for the year after the July decline, and UVA reportedly made money on its investment.
Risk concerns
It remains unclear how much the fund can produce for UVA and other investors going forward, although Aschenbrenner said he had stopped using borrowed money for the time being.
Key facts
- UVA investment return
- UVA’s long-term investments gained 27% in the 12 months ending June 30.
- UVA assets
- The university’s assets reached a record $18.8 billion, about half of it in the endowment.
- Previous UVA return
- UVA’s investments returned 12.4% in the prior year.
- Situational Awareness performance
- The fund rose 200% in 2025 and more than 400% during the first half of this year.
- July loss
- Situational Awareness lost more than two-thirds of its $45 billion during July, according to the report.
- UVA long-short holdings
- UVA held $1.3 billion in long-short stock funds as of June 30, 2025.
- Leverage
- The fund used borrowed money to amplify returns before margin calls forced stock sales.
Sources
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