WEST PALM BEACH, FL (www.hedgeco.net) – A new study of seven hundred and seven endowments of University and independent schools have shown a near five fold increase in the levels of their investmentportfolio returns in the past year. This performance is seen as the best performance of such group since the recent stock market declines. The new study conducted by the Commonfund Institute foundthat the average returns of Endowments stood at 14.7 percent for the past 12 months ending in June 2004.
During the previous year, Endowments achieved an average return of 3.1 percent, followed by two successive years of losses. According to Commonfund, University endowments which have invested heavily in hedge funds and private equity dedicated a total of about 34 percent of their investment portfolios to alternative investments. According to the released data, Endowment groups dedicated a greater portion of their investment portfolios to alternative investment management strategies than the pension fund groups.
Details of the released study show that endowments dedicated 31 percent of their assets to domestic equities, 15 percent were invested in fixed income portfolios, and another 16 percent were put into foreign stocks, while 5 percent were maintained in cash. One of the best performing endowment funds during the past year was the Harvard University Endowment, which returned 21.1 percent, bringing its total assets to over $22.6 billion.
About one third of the polled institutions said they would be investing more assets in alternative investments during the New Year; however such group holds a lower investment return expectation of about 7.9 percent for the 2005 investment year.
John Griswold, Commonfund Institute’s executive director said in a statement, “This year’s study shows that within their allocations to alternative strategies, the Benchmark Leaders (endowments with the best performance) reported lower than average allocations to hedge funds and are more broadly diversified, with higher than average allocations to private equity, real estate and energy/natural resources.�
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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