Chief Investment Officer features insights from NEPC’s Colin Hatton in this in-depth look at endowment performance in fiscal 2025, highlighting the role of private markets, liquidity considerations, and shifting allocation trends. View the full article on CIO’s website to learn more.
Higher education institutions saw strong returns across asset classes, especially in equities, and significant exposure to themes related to digital assets and artificial intelligence.
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Colin Hatton, a principal in NEPC’s endowments and foundations practice, explained that the firm still expects private market assets to provide strong returns.
“Over the long term, we still believe that private markets will outperform the public markets,” Hatton says. “However, we’ve seen that turnaround the last three years. If you look at a 10-year time period, those with heavy alternative allocations did outperform, and if you go back beyond that as well.”
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Hatton notes that because secondary sales lead to a decline in the value of the portfolio—because the assets are generally being sold at a discount—endowments are examining how the haircut will affect spending and distributions to the university.
“I think another thing that institutions are thinking about is how it will affect their spending if they go and do a secondary sale,” Hatton says. “The effect that that can have on the spending policy and the support for the institution is another consideration that these groups are having to think through as they go through this.”
Click here to read the full article on the Chief Investment Officer site.