Endowments Turn to Tech for a Portfolio Boost

(Equities) In 2016, US colleges raised a record $41 billion, with Harvard University leading the pack with $1.2 billion from donations and Stanford coming in a close second at $951 million. While these statistics reflect well on the generosity of wealthy donors, the unfortunate reality is that these same university endowments declined 1.9 percent on average due to poor portfolio performance. Harvard alone had $2 billion in losses.

Stanford was able to offset its investment losses with positive performance of its real estate assets. Other colleges and universities were less fortunate, since their years-old broad-based asset allocation approaches failed to provide solid returns in today’s dynamic business climate. In particular, investments in non-US equities, energy and natural resources, hedge funds, commodities and managed futures declined during 2016.

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