NEPC’s latest Insight “How Should The NACUBO-TIAA Report Impact Endowment Finances?” was recently covered in an article by FIN News to discuss our findings. View the article on FIN News’ site here.
The current state of private markets can create opportunities for smaller endowments to incorporate private equity into their portfolios, according to investment consultant NEPC.
“Disruption in private markets may open up opportunities to endowments. In our view, private markets will continue to reset throughout 2023, and lower valuations may provide attractive entry points,” the firm said, in a recent insight post that noted the financial success of larger higher education endowments is mainly due to private equity market exposure.
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While disruptions to private markets such as the recent bank closures have led to uncertainty, NEPC does not feel there is risk in the banking system but rather opportunities that may open up to endowments.
“Overall, banks are well capitalized. We think the recent closing of Silvergate Bank, Signature Bank and Silicon Valley Bank will prove to be isolated liquidity events that are largely the result of asset-liability mismatches relative to the deposit profile for each bank,” NEPC said.
“Historically, recession- and recovery-era vintage years have created some of the best opportunities to deploy capital to private equity,” according to the firm.