INSTITUTIONAL INVESTOR SENTIMENT SURVEy - PEI Media

Focus on… Endowments
Distribution of Endowments by Region
600
500
institutional
investor
sentiment
survey
No. per region
400
300
200
100
0
Asia-
Pacific
CEE
Latin
America
MEA
North
America Western
Europe
Source: Private Equity International
foreword
executive summary
allocation
fees
lp – gp relationship
future investments
and concerns
appendix: global
fundraising
page 28
Endowments can be non-profit organisations or institutions such as universities. Larger
university endowments in the US invest a greater proportion of their portfolio into
alternative assets including private equity. Within the past two decades, Harvard and Yale
University has been leaders in multi-asset class diversified investing. However they both
witnessed a decline in their assets since the financial crisis of 2008
As of February 2012, the fastest growing US university endowment was the University
of Virginia with a 28 percent increase in its endowment over the past fiscal year. University
of Pittsburgh ranks second at 24 percent, followed by Purdue University. Both the
University of Virginia and University of Pittsburgh invest a fifth of their portfolio into
private equity globally and across diversified fund types. The Purdue University endowment
is a similar size to the University of Pittsburgh however it allocates only 10 percent
of its assets in private equity. Investments are focused on buyout and venture capital funds
in the United States, not made regularly and are targeted with fund managers with a
proven track record.
University endowments in Canada invest between five and 13 percent of their assets in
private equity. The University of British Columbia Endowment allocates the most money
in the asset class at CAD120.45 million (13 percent of total assets), however, the endowment
reduces risk by not fully investing in emerging markets, choosing to focus on North
America, Europe and Asia instead. UK university endowments invest a distribution of
between three and eight percent into private equity. The Oxford University Endowment
Management invests eight percent into the asset class with a value of over £66 million.
Although the Oxford University endowment invests globally, university endowments in
the UK are more likely to invest in specific funds within the regions of North America,
Europe and Asia.
It is clear that the United States is leading the way with multi-asset class investing
in their university endowments. Canadian universities endowments are accelerating the
amount but not frequency of their private equity; however, UK university endowments
remain cautious of their levels of private equity investment.
www.privateequityconnect.com