Hoping to increase its return, Smith College has launched a five-year strategy to allocate one-fourth of its $915 million endowment in alternative funds, Foundation & Endowment Money Management reported March 11.
Jay Yoder, the endowment’s investments manager, said the school was searching for its first absolute-return managers to handle $91.5 million, plus additional venture capital and buyout funds to place $82 million.
“Five years from now when we look back on which asset classes were the most attractive,” he told Foundation & Endowment Money Management,” the absolute return strategy will be right there at the top.”
The five-year goal is to invest 10 percent of the endowment in absolute-return funds and 15 percent in private equity, up from 6 percent now.
Funding for the increase would come from the U.S. equity portfolio, which now accounts for roughly the endowment.
The remainder includes, 28 percent in fixed-income, 12 percent in international equity, 6 percent in private equity and 4 percent in cash.
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