Endowments and Foundations - Articles & White Papers

This study provides an important extension of existing research on the performance of options-based strategies by considering the impact of the inclusion of option-based equity strategies in diversified institutional portfolios. Specifically, the analysis assesses the historical impact of the application of rules-based…

Endowments are a substantial category of institutional investors. Some of these have been on the forefront of moving into new asset classes and new strategies, outperforming many other investors. What are the factors of success and lessons learned?

The focus of this paper is on endowments and foundations that aim to maintain intergenerational equity. In these cases, the investment asset base, or corpus, is typically meant to last forever. At the same time, it is expected to generate substantial and reliable early income to support the ongoing operations and/or grant…

The purpose of this white paper is to encourage conversation about the societal and financial benefits of clean energy investments and explore the barriers to such investments. University endowments have over $528 billion in assets, the ability to make illiquid investments, and long-term investment horizons. They are…

This document is a primer to provide: (1) Strategic questions to consider. (2) Background and an overview of integrating sustainability factors for investment returns and a healthy, just,and sustainable society. (3) The status and trends in sustainable investing for college and university endowments. (4) A brainstorming list…

Using the unique laboratory of university endowments, we study the effects of expertise and networks on investment performance. Using detailed information on more than 11,000 unique board members for 579 university endowments, we show that the financial expertise of an endowment’s governing board is positively correlated…

This brief argues that, counter to common practice, trustees should turn their backs on market values and instead focus on the real cash flows that their assets can generate. For bonds, this would mean their real interest rate. For equities, this would mean their underlying profits. This focus on asset cash flows, rather…

How universities are tackling the fossil-fuel investment debate. As awareness of climate change has grown in recent years, investing in fossil fuels has become an increasingly contentious issue. Student groups, in particular, have voiced their opposition to investments made on behalf of their establishments that they deem…

We investigate the role of different spending rules in a dynamic asset allocation model for university endowment funds. In particular, we consider the fixed consumption-wealth ratio (CW) rule and the hybrid rule which smoothes spending over time. We derive the optimal portfolios under these two strategies and compare them…

Increasingly, college and university endowments are exploring and implementing strategies for endowment portfolios to more closely align their investments with institutional mission and sustainability goals. One strategy to do so is to invest with a gender lens—investing for financial return while promoting gender diversity…

Investment Consultants can play a central role incorporating environmental, social and governance (ESG) factors into an endowment’s investment strategy.Growing investor demand for portfolios that integrate ESG factors has spurred many investment consultants to work toward expanding their knowledge and use of ESG strategies.…

This pilot research study assesses the annualised impact performance of direct impact investments in affordable housing. It addresses two sets of questions: (1) Feasibility: Is it possible to aggregate and compare impact performance data to generate insights? (2) Results: If so what social and environmental results are…

This briefing paper will focus on one clean energy investment opportunity: how to most effectively enable endowments to make investments in solar projects. It will provide guidance on three main approaches endowments can utilize to invest in solar: allocating capital across traditional asset classes in the investment…

This work is the first substantial step towards clarifying significant market gaps through "heat maps” that identify under-invested market segments and highlighting direct feedback from ultra high net worth investors on the ways that wealth managers can better serve their impact investment objectives.

The authors present a ranking of the top 100 college endowments by their 5-year average returns.

Before selecting a spending policy model, a nonprofit board should analyze the organization's statement of operations and capital structure to understand how variable revenue and expenses are. By reviewing integral aspects of its finances in addition to market factors such as prospective returns and inflation, board…

The estimation of risk factors and their replication through mimicking portfolios are of critical importance for academics and practitioners in finance. We propose a general optimization framework to construct macro factor mimicking portfolios that encompasses existing portfolio mimicking approaches, such as two-pass cross-…

For the top endowments, these and other innovative portfolio decisions have created great, long-term alpha versus a global balanced benchmark with 70% stocks/30% bonds. Since asset allocation plays a large role in determining portfolio returns, it is interesting to compare how beta (or index fund) portfolios have compared…

Increasingly, endowments are exploring and implementing strategies for more closely aligning investment portfolios with institutional mission and sustainability goals.This Roadmap guides investors through key steps toward creating intentionally designed endowments — those that look to align investment practices with…

Each issue of The Skorina Letter explores how the world’s most accomplished asset managers think and invest. Insights and commentary come from clients of Charles Skorina & Company – board members, CEOs, chief investment officers – and the global investment community within which the firm works as executive search…