•Press Release University Endowment
Washington, DC — University endowment portfolios are under scrutiny as students question their investments. A new analysis by CEPR’s Alex Richwine and Dean Baker shows that unresponsive endowment fund managers may be hiding more than certain business investments. The analysis shows how Ivy League endowment portfolios underperform and needlessly pay hefty manager fees to engage in risky investments.
“While university administrations have been dismissive of student divestment demands, the data show that many Ivy League university endowment portfolios fail to outperform the kind of simple portfolio mix your cousin might suggest,” said co-author Richwine.
The analysis finds that often the university’s alliance with hedge fund managers is stronger than accountability to university constituencies. Specifically, the Ivies and other university funds are under the influence of the so-called “Yale model” of endowment management that has devolved into simply increasing the proportion of hedge funds and private equity. The result is a “bloated, fee-driven investment management” strategy.
