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Small Endowments Lose Money on Hedge Funds, Trailing Big Schools

by bloomberg.com posted 2years ago 10918 views
Smaller U.S. college endowments lost money on their hedge fund investments in the most recent year, trailing larger universities that often have access to better-performing managers. Endowments with assets under $25 million lost an average 0.5 percent on hedged strategies in the year ended June 30, according to a survey by a trade group that represents college business officers. Overall these funds gained 2.3 percent, just below the average for endowments of all sizes. The Standard & Poor’s 500-Stock Index gained 4.6 percent in that time. These returns, along with high fees, are of concern to Hedge Clippers, a group that says pension funds and endowments aren’t getting their money’s worth by investing with these managers. Shifting assets away from such high-fee investments means an endowment could pay out more money to lower tuition costs, according to a separate report set for release Monday.