Unexceptional Endowment Performance

Abstract

Conventional wisdom has it that the investment offices of leading universities are exceptional in the realm of institutional investing. Siegel (2021), for example, provides a fulsome account of what he sees as their competitive advantages. He concludes, “Endowment funds have...structural advantages...that should allow them to earn above-market risk-adjusted returns in the long run.” Hmm. Is endowment exceptionalism real? Is it myth? A little of both?

Keywords: Endowments, Pension Funds, Institutional Investors, Asset Allocation, Alternatives, Private Equity, Private Real Estate, Hedge Funds, Fees, Investment Performance, Expense Ratio, Benchmarking, Risk, Great Financial Crisis (GFC)