NEPC’s Colin Hatton was recently quoted in a PitchBook article exploring how elite university endowments are facing pressure from underperforming private markets, rising costs, and political scrutiny. He highlights the need for diversification and suggests endowments may need to adjust asset allocations as private equity returns decline. View excerpts below or read the full article on the PitchBook site here.
Endowment investment teams at top universities are exploring options to cash out of some of their public market investments, primarily through hedge fund redemptions, to compensate for federal funding cuts and prepare for potential tax increases.
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“With greater levels of uncertainty, you want to understand what your liquidity needs are going to be,” said Colin Hatton, a principal at LP consultant NEPC, where he advises endowments and foundations.
Hatton said his firm is advising clients to keep sufficient capital in safe-haven assets, and in some cases, to take out lines of credit on their portfolios for more liquidity.