Trends
The energy transition is drawing interest from institutions as more than half believe they can “significantly influence” its progress, a new study finds.
While the upsets, buzzer beaters and Cinderella stories will take place on the hardwood, Nonprofit News examined how each team stacks up off the court from an endowment perspective.
Historically Black colleges and universities have had to operate without the support and resources made available to their peers traditionally, yet they have persisted in fostering their students and communities.
The institutions are facing new and increased pressure to leverage their endowment investments to ensure continued independence and long-term sustainability, something that is proving to be difficult as HBCU investment returns have lagged their non-HBCU peers for the past three years due to smaller allocations to alternatives and significantly fewer investment management resources, among other factors.
The average 2023 fiscal year return of colleges and universities’ endowments exceeded fiscal year 2022 returns as the smaller endowments’ public market exposures helped them outperform their larger peers.
The fourth quarter had 35 completed investment consultant hires, according to FIN Searches data.
Industry strategists see investment opportunities outside of the U.S. in emerging markets, but risks, such as China and its slow growth, pose challenges that institutions should be mindful about, according to a recent webinar.
Nonprofits still see opportunities in alternative asset classes, like smaller or specialized buyout strategies, venture funds or private debt strategies that benefit from macro trends like the higher interest rates, rapid development of artificial intelligence or transition to clean energy.
As U.S. professionally managed assets declined in 2022, Cerulli Associates’ latest report found a temporary trend reversal where institutional channel assets gained a slight edge over retail.
2023 was supposed to be a down year for foundations and endowments with a potentially recessionary environment, however, equity and bond returns came out in the green, thanks in part to strong fourth quarters, leaving investors and allocators with a more optimistic outlook for their portfolios entering 2024.
Regardless of whether inflation continues to slow or the global economy steers clear of a recession, endowments and foundations should not base portfolio construction on market timing but instead focus on longer-term areas of opportunity like private equity and international equities, according to one consulting firm.
