Hedge fund is a relatively new but topical word in the ivory tower of university endowments. Its “hedging” nature helps investors balance the risk of total portfolios, as they look to provide positive returns in both up and down markets.
In recent years, however, hedge funds haven’t accomplished much to prove their value. Industry wide, they have underperformed the S&P 500 index for the past seven years, according to Hedge Fund Research Inc., a period long enough to even worry less time-sensitive long-term investors like endowments. Notable investors, such as CalSTRS Chief Investment Officer Chris Ailman and former hedge fund titan Steven Cohen, have publicly criticized the industry and its high fee structure.
In light of recent events, Trusted Insight compiled a list of 20 universities with more than 20 percent of their investments allocated in hedge funds. We analyzed 2015 financial data of U.S. university endowments and foundations managing over $1 billion dollars in assets. Although financial data for every university is not publically available, it’s fair to say these are among the fondest hedge funds investors in the endowment world.
20. University of Pennsylvania
Total Assets Under Management: $10.13B
Hedge Funds Allocation: 31.3%
2015 Total Return: 7.4%
19. University of Chicago
Total Assets Under Management: $7.55B
Hedge Funds Allocation: 30%
2015 Total Return: 4.8%
18. University of Illinois
Total Assets Under Management: $2.39B
Hedge Funds Allocation: 30%
2015 Total Return: 2.81%
17. Michigan State University*
Total Assets Under Management: $2.28B
Hedge Funds Allocation: 29%
2015 Total Return: 3.5%
16. University of Rochester
Total Assets Under Management: $2.05B
Hedge Funds Allocation: 27%
2015 Total Return: 4.3%
15. Dartmouth College
Total Assets Under Management: $4.67B
Hedge Funds Allocation: 24.7%
2015 Total Return: 8.3%
14. Wellesley College
Total Assets Under Management: $1.85B
Hedge Funds Allocation: 24%
2015 Total Return: 5.9%
13. Boston College
Total Assets Under Management: $2.22B
Hedge Funds Allocation: 24%
2015 Total Return: 4.3%
12. University of North Carolina
Total Assets Under Management: $4.64B
Hedge Funds Allocation: 20%
2015 Total Return: 9.3%
11. Amherst College
Total Assets Under Management: $2.19B
Hedge Funds Allocation: 23%
2015 Total Return: 5.4%
10. Grinnell College
Total Assets Under Management: $1.79B
Hedge Funds Allocation: 23%
2015 Total Return: 0.5%
09. Northwestern University
Total Assets Under Management: $10.19B
Hedge Funds Allocation: 22.6%
2015 Total Return: 2.5%
08. Ohio State University
Total Assets Under Management: $3.63B
Hedge Funds Allocation: 22.5%
2015 Total Return: 3.8%
07. Stanford University
Total Assets Under Management: $22.22B
Hedge Funds Allocation: 22%
2015 Total Return: 7%
06. Georgia Institute of Technology
Total Assets Under Management: $1.86B
Hedge Funds Allocation: 22%
2015 Total Return: 1.9%
05. Princeton University
Total Assets Under Management: $22.72B
Hedge Funds Allocation: 21%
2015 Total Return: 12.7%
04. University of California
Total Assets Under Management: $8B
Hedge Funds Allocation: 21%
2015 Total Return: 1.4%
03. Yale University
Total Assets Under Management: $25.57B
Hedge Funds Allocation: 20.5%
2015 Total Return: 11.5%
02. Vanderbilt University
Total Assets Under Management: $4.13B
Hedge Funds Allocation: 20.4%
2015 Total Return: 3.7%
01. Pomona College
Total Assets Under Management: $2.1B
Hedge Funds Allocation: 20%
2015 Total Return: 3.3%
*Michigan State University's hedge funds allocation percentage is its target allocation of 2015, not actual allocation.
For questions, comments or story ideas, please contact us at editorial@thetrustedinsight.com