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Komfie Manalo, Opalesque Asia: The CEO of Commonfund, an asset management firm that serves endowments, foundations and public pension funds, is asking endowments to scale back on their hedge fund portfolios to at least 10% of their assets "to protect against market downturns."
Commonfund chief executive officer Catherine Ann Keating is offering the advice citing the many risks associated with hedge fund investing, reports Bloomberg
She told Bloomberg TV, "There is a lot of equity risk in the typical hedge fund, not necessarily all of them, but in many hedge funds there is a lot of risk. You don't need to get equity risk through a hedge fund these days. You can get it through an index fund and pay very little for it."
According to Keating, large endowments allocated up to 20% of their portfolios to hedge funds five years ago. She told these institutional investors to instead look for asset managers that provides "differentiated sources of return that you're not already getting through your allocations to stocks and bonds," that are offering specific strategies like relative value, macro, and credit-based funds.
A joint study by the National Association of Colleges, University Business Officers and Commonfund showed that in fiscal 2017, up to 52% of assets of U.S. university endowments are allocated to alternative investm...................... To view our full article Click here
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