Hedge Funds and Universities

1,379
-1

Published on

The partnership between hedge funds and university and college endowments continues to grow. For many educational institutions, hedge funds are an important tool used to diversify their portfolios, manage risk and produce reliable returns. Hedge fund investments help these institutions fund financial aid, scholarships, operations, research, academics and athletic programs.

Published in: Economy & Finance, Business
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,379
On Slideshare
0
From Embeds
0
Number of Embeds
4
Actions
Shares
0
Downloads
12
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Hedge Funds and Universities

  1. 1. Hedge Funds and Universities Managed Funds Association | February 2014
  2. 2. Overview Hedge funds originated as an investment vehicle to help diversify portfolios, manage risk, and produce reliable returns over time. While hedge funds’ investor base has evolved though the years – from individuals to institutions such as pension plans, universities, and foundations – their core goals have not. Institutions face mounting challenges toward meeting their financial obligations and abilities. Hedge fund investments help these institutions fund scholarships, financial aid, research and athletics. Institutional investors have shifted investment strategies in recent years to alternative investments - including hedge funds- which have helped place institutions on firmer ground over the long-term. This presentation details the growing partnerships between hedge funds and university and college endowments. 2
  3. 3. 1 Hedge Funds and Universities Hedge funds’ investor base has evolved significantly over the years, with 66% of assets under management currently coming from institutional investors such as pensions, endowments, and foundations.* Many institutions are currently working to cope with major demographic and fiscal challenges, including funding shortfalls for things like financial aid, research, athletics and other programs. As a result, institutions are increasingly seeking ways to diversify their investment portfolios to produce reliable returns. FACT: 66% of hedge fund assets are held by institutional investors. *Source: 2014 Preqin Global Hedge Fund Report. 3
  4. 4. 2 Hedge Funds and Universities Hedge fund investments help these institutions fund: • Financial aid and scholarships at colleges and universities • Research and Clinical Trials • Athletics • Expansion and operations at universities campuses 4
  5. 5. 3 Universities and College Endowments Invest in Hedge Funds University and college endowments were among the first institutions to partner with hedge funds in the early 1990’s, and this relationship has strengthened in recent years. A recent study estimated that a modest allocation to hedge funds could improve returns of U.S. college and university endowments by approximately $1.73 billion annually.* Endowments investing in hedge funds include: *Source: The Changing Role of Hedge Funds in the Global Economy, Everett Ehrlich, pp. 1 (September, 2011) 5
  6. 6. 4 Universities Are Increasing Their Investments in Alternatives According to recent data from the National Association of College and University Business Officers (NACUBO), endowments have steadily increased investment allocations to alternative investments, including hedge funds, over the last 10 years. University Asset Allocations to Alternatives/Hedge Funds Source: Alternatives Reality: What to Expect From Future Allocations, January 2014 (Commonfund Institute) 6
  7. 7. 5 Summary The partnership between hedge funds and university and college endowments continues to grow. For many educational institutions, hedge funds are an important tool used to diversify their portfolios, manage risk and produce reliable returns. Hedge fund investments help these institutions fund financial aid, scholarships, operations, research, academics and athletic programs. Hedge funds are not a silver bullet, but they are increasingly part of a comprehensive and responsible approach toward meeting financial obligations. 7
  8. 8. 6 Hedge Funds Investor Map To learn more about how hedge funds help university and college endowments fund scholarships and research for students in your state, click here. 8

×