MFA Blog

New Study Shows Endowments and Foundations Turning to Hedge Funds and Alternatives

Posted on December 12, 2013

A recent study released by the consulting firm NEPC notes that endowments and foundations are looking to alternatives and hedge funds in favor of equity allocations.  About 40% of the survey’s respondents said they plan to increase their allocations to hedge funds and real assets in 2014.

Cathy Konicki, partner and head of NEPC’s Endowment & Foundation Practice Group noted that 86% of respondents said the economy is at a better or the same place as this time last year.  Regardless of their approval and the market’s overall performance, endowments and foundations are looking to cut back their equities allocations in favor of hedge funds and other alternative investments.

“When asked about confidence in their organizations’ ability to comfortably meet investment return objectives for FY 2014, 61% of respondents said they’re ‘highly’ or ‘moderately’ confident,” Opalesque wrote about the survey.  Sixty percent of respondents said that a slowdown in global growth poses the single greatest threat to investment performance over the short term.  Over the long-term, 73% of endowments and foundations that responded noted that lower than expected market returns are the greatest risk to their investments.

Read more about endowments and foundations cutting back on equity exposure in favor of hedge funds and other alternatives from Opalesque.