Institutional Investor

The reason behind Brown University’s endowment outperformance is not what most people think, according to an analysis from MPI. Read more from Julie Segal, in Institutional Investor.

“Last year was a great one for private equity and venture capital, but Ivy League endowments, with their huge allocations to alternative investments, didn’t all benefit, according to MPI.,” writes Julie Segal about MPI’s research in her article in Institutional Investor. 

“The quantitative analysis firm has a method for back-solving portfolios using returns rather than squishy self-reported allocations, and produced a study for Institutional Investor,” writes Leanna Orr about MPI in her article “David Swensen Is Great for Yale. Is He Horrible for Investing?”

“Public pension funds aren’t the only institutions to fail to benefit from the heady promise of alternatives. The performance of Ivy League endowments has trailed a passive portfolio of 60 percent U.S. stocks and 40 percent bonds over the past ten years — and has been more volatile to boot, according to a report from research and analytics provider Markov Processes International.” Read the full article here.

“There’s a tug of war going on in endowments, as well as in asset management,” said Jeff Schwartz, president of MPI. “A lot of people are hoping that there is no point in investing in these complex alternatives. Then you have devotees of the Yale model who want to show there is a payoff for putting so much of the portfolio into private equity, VC, and all the things we think of as sophisticated and expensive. This report shows that the reality is much more complex than either narrative.” Read the full article here.

“This year’s gains were driven by alternative investment strategies. Ivy League asset managers have been ramping up allocations to alternative asset classes in recent years in hopes of outperforming broad market indexes. “What we definitely see is that the funds that were highly exposed to private equity and venture capital did very well,” said Jeff Schwartz, president at MPI.” Read the full article here.

“Between 2010 and 2015, many investors could have dismissed non-traditional bond funds as a high-priced gimmick, delivering no benefit over traditional core bond funds. As the economy recovered and interest rates rose, however, these funds look to have been well positioned to benefit, helping them to outperform since 2015,” says MPI’s Sean Ryan in this article looking at the performance of the unconstrained bond funds by Institutional Investor‘s Julie Segal.

“MPI has evaluated endowment returns using its patented process, called “Dynamic Style Analysis,” which was designed to model the behavior of otherwise secretive investments such as hedge funds or university portfolios,” explains Julie Segal of Institutional Investor. “The annual results of Yale and the Ivy League colleges and universities, which have huge commitments to private investments, are closely watched by the industry.” Read the full article here.

“MPI’s new effort is an attempt to create an alternative to existing hedge fund benchmarks that follow the entire market and whose composition can fluctuate as smaller funds fail to report their holdings or close altogether,” explains Julie Segal in her coverage of the MPI Hedge Fund Indices launch. “MPI will instead include only the returns of the largest firms, which it believes are more stable and give a true picture of performance.” Read the full article here.

“The smart beta label still represents a small, new, heterogeneous, and most likely misunderstood, group of exchange-traded funds in the fixed income space,” says MPI’s Megan Woods in this article on Smart Beta bond funds by Institutional Investor‘s Julie Segal.