Administration July 3, 2002

Endowments Embrace Alternative Investments

March 19, 2001 (PLANSPONSOR.com) - Higher education endowments are making a larger commitment to alternative asset classes, according to a new study.
Reported by

The Greenwich Associates study of 563 endowments found that 60% invest in alternative asset classes, which now comprise 23% of their portfolios, on average.  The Commonfund Institute commissioned the study.

Not surprisingly, larger institutions allocate more funds to private equity, hedge funds and venture capital.  Endowments with more than $1 billion investing nearly a third (29%) of their funds in alternative investments, compared with just 5% of the assets of endowments with less than $10 million in assets, according to Dow Jones.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Of the investment in alternative investments, the average institution is investing:

  • 28% in hedge funds
  • 24% in venture capital
  • 22% in private equity

The study also found that large endowments tend to be more successful investors.  Endowments of more than $1 billion earned an average return of 23.9% last year, compared with just 13.7% on average for those with less than $10 million.

«