Endowments took a beating
Foundations and endowments were the worst performers among tax-exempt institutional funds for the one-year period ended June 30, according to the Wilshire Trust Universe Comparison Service, a widely used benchmark.
Foundations and endowments were the worst performers among tax-exempt institutional funds for the one-year period ended June 30, according to the Wilshire Trust Universe Comparison Service, a widely used benchmark.
The endowment model of in-vesting, which tilts heavily toward illiquid equity investments as part of a broadly diversified mix, was hit hard by the market downturn and the liquidity crisis.
Most endowments use a fiscal year ending in June, and the reDan Jamiesonsults from that period aren’t pretty.
Yale’s endowment produced a -24.6% return for the period, and Harvard’s performance was -27.3%.
Princeton University was the latest to report the bad news, announcing last month that its endowment had investment losses of nearly 24%.
That compares with a median loss of 19.14% for foundations and endowments as a whole, according to the Wilshire Trust Universe, a cooperative effort of Wilshire Analytics — which is the investment technology unit of Wilshire Associates — and the investment funds that report the data.
More bad news could be coming, depending upon how much more the illiquid assets held by endowments were marked down and how quickly various markets recover.
“There will be some very poor performance numbers” coming from private-equity shops, said Dan Lubek, managing director of Solis Capital Partners LLC, a private-equity firm.
“There will some very unhappy limited partners,” he said.
— Dan Jamieson
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