endowments

In his FundFire article, Sabiq Shahidullah draws on MPI’s quantitative analysis, “Solving the Biggest Puzzle of the 2024 Endowment Season,“ to provide transparency into Michigan State’s top-performing endowment, given the limited information from the school’s public disclosures and a CIO interview. He quotes MPI’s analysis and uses its findings throughout the piece:  “A defining feature of MSU’s portfolio is its focus on tech stocks, which was the primary driver of returns, said Michael Markov, co-founder and chairman of Markov Processes. The endowment’s tech exposure comes not only through direct equity holdings, but also tech-focused hedge fund strategies and private equity and venture capital funds. MSU and Brown University share a similar tech-forward portfolio strategy, although MSU has an even stronger tech bias, Markov added.” (FundFire subscription required)

Risk.net’s Luke Clancy steps into the role of a due diligence analyst, drawing on insights from MPI’s research Solving the Biggest Puzzle of the 2024 Endowment Season to interview Phil Zecher, the star CIO behind the top-performing Michigan State University (MSU) endowment. He writes:

“The composition of the equity portfolio – which Zecher keeps closely guarded – is the subject of intense speculation. Quantitative analytics firm Markov Processes International (MPI) claims to have reverse-engineered the source of MSU’s returns from 14 annual published returns. It says the most striking factor is MSU’s significant exposure to technology stocks, the highest amongst peer endowments.”

Read the entire Risk.net story here (subscription required).

“Universities with large allocations to private markets are borrowing in the bond market to address funding issues, as private equity capital calls can compete with research funding for liquidity,” says Matt Toledo of the CIO magazine in his story discussing challenges facing elite universities in light of potential and real cuts in federal research grants.

The article draws extensively on MPI’s research into endowment liquidity, including insights from the MPI Transparency Lab.

Using quantitative analysis and MPI Stylus Pro to determine how Michigan State managed to outperform just about everyone

Bloomberg News’ Opinion Column Points of Return by John Authers & Richard Annerquaye Abbey covered MPI’s annual 2024 fiscal year Ivy Endowment Review. It focuses on “For this year, Harvard, the nation’s largest endowment, which has had a tough run, made a 9.6% return, finishing third behind Columbia and Brown. Harvard’s outperformance coincides with raised exposure to public tech stocks, both via equity fund managers and hedge funds. As MPI points out, endowment managers who pivoted toward tech stocks have reason to be particularly grateful at a time when alumni donations have been trimmed in response to the fraught climate on campus.”

Ivy endowment Fiscal 2024 in review: risks; VC; long-term vs recent years; prospects of Yale Model.

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.