Small Colleges Take New Investment Approach
May 5, 2006 | Read Time: 1 minute
Several small universities are copying the investing strategies at Harvard and Yale and using approaches that involve more risks than they previously took, reports BusinessWeek magazine.
By investing in hedge funds, big universities posted strong returns even during market downswings, and smaller colleges took notice, the magazine says. However, some experts say smaller institutions often don’t fully appreciate the risks involved with such aggressive growth strategies.
“A lot of [small] endowments don’t have the necessary head count to watch what this or that hedge fund is doing,” says Jud Koss, a managing director at Commonfund, an organization that handles investments for many colleges and other nonprofit groups.
For more about nonprofit endowments, see The Chronicle’s special supplement on endowments. (A paid subscription is required to view this supplement.)
