Endowments_May_Pull_Back_from_Alts

Endowments_May_Pull_Back_from_Alts - Endowments May Pull...

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Endowments May Pull Back from Alts: Barron’s Article published on November 11, 2008 College endowments' reliance on alternatives may be due for reconsideration amid painful bear- market losses and drastically devalued holdings, Barron's reports. The magazine argues that a swing back to equity and bond investing may be on the cards. Yale and Princeton universities have 70% of assets in alts -- primarily hedge funds, private equity and real assets such as timber and real estate -- while Harvard University 's allocation is 57%. Those holdings have generated strong returns over the past decade, ranging from Harvard's annual return of 13.8% to Yale's 16.3%, compared with 6% for the average institutional portfolio. Such results have prompted other colleges to try to emulate the Ivy League elites' strategy. But such investments haven't provided much in the way of diversification and liquidity, nor have they performed significantly better of late than the stock market, Barron's points out. Harvard, Yale and Princeton aren't disclosing their recent returns. But
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