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November 22, 2006
US University Endowments Pile Into Hedge Funds
The U.S.'s 53 largest university endowments have put $40 billion into hedge-fund investments, according to a report by data provider and publisher InvestHedge.
Harvard University is the largest investor of its type in hedge funds, with roughly $5 billion - or 17% of its $29.2 billion endowment.
The University of Virginia has the highest allocation, with $1.7 billion of its $3.4 billion fund - 51.7% - in hedge funds. At least five more endowments have more than 30% of their total assets in hedge funds.
In all, the 53 endowments, which all have at least $1 billion in assets, control about 3% of the world's estimated $1.3 trillion in hedge fund assets.
University endowments have been piling into hedge funds to boost their returns and diversify their holdings from the typical mix of stocks, equities and real estate.
Their models of success are the endowment funds run by Harvard University and Yale University, which were early investors in hedge funds and have consistently posted double-digit returns from their holdings.
The average annualized return for the 53 endowments across all assets is 15.3% , InvestHedge said.
In addition to Harvard and Yale, at least eight more endowments have at least $1 billion invested in hedge funds.
-Dow Jones-
Posted by su at November 22, 2006 11:44 AM