(MONEY Magazine) – Two decades ago the University of Pennsylvania and New York University were struggling to build their reputations and their endowments. To help with the latter, each sought out an investment titan.

Today the schools are hot, but only one of their endowments has hit the big time. What happened?

In 1980, John Neff, a top value investor and then manager of Vanguard Windsor Fund, started managing the equity side of Penn's portfolio. Neff has produced an annualized return of 16.1% largely by mirroring his fund strategies.

In 1978, Laurence Tisch, CEO of tobacco and insurance company Loews Corp., became chairman of NYU's board of trustees. NYU won't comment on numbers, but a look at its endowment shows a return of about 7% since 1980 as the board under Tisch, a longtime bear, stuck largely to fixed-income investments. NYU's financial straits in the '80s caused the aversion to stocks, says Michael Steinhardt, a retired money manager who heads the school's investment committee. "The trustees did not want to diminish the assurance that the endowment was there in case of emergency," he says. Tisch declined comment.

Now both schools are changing the way they run their money. At Penn, Neff, 66, has been winding down since retiring from Vanguard in 1995, and the school is switching to multiple outside advisers.

NYU, meanwhile, is increasing its equity allocation, even as fear grows that the stock market is near a top. By year's end, NYU expects half its endowment to be in equitylike investments. Penn is 60% invested in stocks.

Although schools use part of their endowment returns to fund operations, Neff's sterling performance hasn't exactly made Penn a bargain. It hiked tuition for next year 4.5% to $23,254; NYU upped its bill 3.9% to $22,586.

--Laura Washington