Monday, 28 July 2014
Last updated 11 hours ago
Feb 21 2012 | 1:19am ET
Having grown fat on credit hedge funds, one Ivy League school's endowment is taking profits.
The University of Pennsylvania's $6.6 billion endowment plans to cut its credit hedge fund investments and move the money elsewhere. Which is not to say that the Philadelphia school, home to the Wharton School of Business, has soured on the asset class.
"We had an oversized position in credit," chief investment officer Kristin Gilbertson told Bloomberg News. "It's gone up so it's more fairly valued. We were taking some winnings off the table."
Penn has a 25% allocation to hedge funds and is adjusting its weightings within the asset class, Gilbertson said.
Penn's endowment returned 19% in the year-ended June 30, compared to returns slightly in excess of 20% for its larger rivals, Harvard University and Yale University.
Gilbertson also said that Penn is joining with other institutional investors in demanding fee breaks from its hedge fund managers.
"We are pushing back on fees," she told the National Association of College and University Business Officers' Endowment Management Forum. "The bar is very high to get that carry."
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…