endowments

Great to share insights and analyses of elite endowments with FundFire for their story US Stocks, Venture Capital Swayed Ivy Returns in FY24 by Sabiq Shahidullah (subscription required).

Our co-founder and CEO Michael Markov is quoted alongside FEG Investment Advisors CIO Gregory Dowling, CFA, CAIA and Rob Appling of Wilshire, as well as statements from Ivy endowment leaders Kim Lew of Columbia University, Jane Dietze of Brown University, Narv Narvekar of Harvard University and Matt Mendelsohn of Yale University.

Visit the MPI Transparency Lab, our free resource providing data and investment analysis on opaque institutional portfolios, now updated with elite endowment returns and analyses through fiscal ’24: MPI Transparency Lab

“Overweighting IT and the Mag 7 relative to the broad S&P 500″ may have helped boost returns… “Harvard seems to have overcome the drag of their significant private markets exposure to outperform our estimates—based on our models of their portfolio behavior through FY2023—by a surprising margin.” MPI CEO Michael Markov parsed Harvard University endowment’s solid return for fiscal year 2024 with Institutional Investor for James Comtois‘ story What Drove Harvard’s Returns? The article dissects the Harvard Management Company’s CEO N.P. “Narv” Narvekar annual letter to investors and the Harvard community through the lens of MPI’s quantitative prism.

“If I need cash, I’m probably going to sell out parts of my U.S. equity portfolio, because it’s had such a great run. Interest rates are high, which means that I’m getting good yields from my fixed income portfolio.” — Jeff Schwartz, President at MPI.

FundFire’s top headline today Ivy Endowments Face Liquidity Constraints amid PE Slump — features Jeff’s comments and MPI’s latest research A Private Equity Liquidity Squeeze By Any Other Name. Sabiq Shahidullah’s story covers a lot of important concepts in endowment investing and private markets; check it out if you’re a subscriber.

“Given endowments’ high allocations to private equity, ‘there looks to be more artful navigating ahead,’ Markov said in its study. The schools may need to come up with other sources of cash to cover future spending needs, as private equity hasn’t been returning as much money to investors as expected.

Endowments may need to rely more on their liquid holdings of public stocks and bonds to make up for the shortfall, sell some private equity positions at a discount on the secondaries market or even issue debt, according to Markov, a research firm that studies the opaque world of endowments.”

MPI research A Private Equity Liquidity Squeeze By Any Other Name was featured in Bloomberg News in a story Top Colleges’ Liquidity Pressured by Weak Private Equity Returns by Marion Halftermeyer who closely covers the intersection between GPs and LPs.

How the anemic deal climate, record low distributions and massive unfunded capital commitments are pushing endowments further into illiquid private equity & venture capital, increasing risk & leverage in portfolios (and markets broadly)

The endowment portfolios of 50 years ago are barely recognizable. As the class of 2024 looks to the future and FY 2024 closes out, Robin Wigglesworth captures the evolution of the endowment model of investing very well in his Financial Times Alphaville piece, “American endowments’ complicated love affair with private equity.” When describing risks of private investments, he mentions MPI research FY2023 Ivy Report Card: Volatility Laundering and the Hangover from Private Markets Investing.

MPI’s CEO interviewed by John Authers‘ protege Richard Annerquaye Abbey on Ivy League endowments and how MPI Transparency Lab keeps tabs on risk, return and asset class attribution at the large, elite schools employing the Yale Model. See their Bloomberg Opinion “Points of Return” column “Don’t Declare the Death of the Yale Model Just Yet” covering MPI’s latest FY 2023 Ivy Report Card.

CIO Magazine’s Matt Toledo provides an analysis of both the NACUBO’s 2023 Fiscal Year study and MPI’s 9-th annual quantitative report of Ivy Endowment performance and risk. In his article U.S. College Endowments Gained 7.7% in Fiscal 2023, Although Suffer From Weak Alternatives Returns (ai-cio.com)  ​​​“For multiple reasons it is unlikely that endowments that are heavily allocated to private markets and alternatives veer from the so called ‘Yale model’ after the challenges of fiscal year 2023. Our research shows that Ivy and elite endowments are risk takers, and their portfolios are not particularly efficient​,​” MPI CEO Michael Markov was quoted when discussing the possibility of shifting allocations to public equities.

An extensive coverage by Julie Segal in her Institutional Investor article of the MPI’s 9-th annual Ivy League endowment report. She writes: “With little transparency into endowment portfolios, MPI used its proprietary returns-based style analysis to determine the exposure that the Ivy League and elite colleges had to major asset classes — and their contribution to the performance of the entire portfolio in fiscal year 2023… Even in a good year, “you’re not going to get a lot of transparency,” Markov [MPI’s CEO] told Institutional Investor. “But in a bad year, you’ll get zero transparency from endowments. It’s not pensions where they have to give something to people.”

Matt Toledo with CIO Magazine reviews in this article recent performance of top endowments from Yale, UPenn and Stanford and compares them with projections from MPI Transparency Lab. “Stanford announced on Thursday a 4.4% return in fiscal 2023, slightly below MPI’s estimate of 6.42%. Stanford attributed its underperformance—as compared with Cambridge Associates’ 6.9% median return for university endowments—to losses in its venture capital investments, in line with MPI’s projections,” – he writes.