Seventy-Five Years of Investing for Future Generations
University endowments invest for future generations, so their strategy should reflect their long horizon. The authors researched whether they really do behave like long-term investors. Chambers, Dimson and Kaffe examined the behavior of US endowments since 1945 and drew comparisons with earlier periods. Using a long-run dataset on 12 major universities, examined their preferences for risky assets and documented their big strategic moves into equities and, later, into alternatives. The authors then analysed how they invest at the time of crises and the extent to which they exploit their long-horizon advantage. The findings highlighted on average, endowments invested countercyclically at crisis times, particularly by increasing their allocations to risky assets after a crisis.
Click here to read the full article published in the Financial Analysts Journal .