Washington Post – How does someone put $425 million of a university’s hard-earned endowment into hedge funds, corporate buyout partnerships and real estate?<\/p>\n
Very slowly and carefully.<\/p>\n
That’s how Lawrence Kochard<\/em> is approaching his job two years after Georgetown University<\/em> hired him as chief investment officer of its $850 million endowment. The university has set a goal of investing 50 percent of the fund’s assets in these “alternative investments” — which generally means anything other than conservative investment-grade bonds and traditional positions in stocks. When Kochard was hired, Georgetown didn’t have any alternative investments.<\/p>\n Kochard’s task isn’t unique. Endowments across the public and private spectrum of universities and foundations have been pouring money into hedge-fund and private-equity partnerships to boost returns, trying to mimic the multibillion-dollar investment successes of the huge endowments at Yale and Harvard universities. Such investment vehicles have been producing unprecedented returns in recent years.<\/p>\n Private equity firms — such as venture capital and corporate buyout funds that specialize in five-to-seven year investments in private companies — are expected to raise a record $300 billion this year, up from about $260 billion last year, according to research firm Private Equity Intelligence. A good portion of that fund growth comes from endowments.<\/p>\n