NEPC’s Colin Hatton shares insights with Pensions & Investments on the evolving role of venture capital and real estate within higher education endowments. The article explores how endowments are navigating market volatility and uncovering new opportunities across asset classes. Visit Pensions & Investments to read the full piece.
In a year marked by political headwinds, budget cuts and volatile markets, U.S. colleges, universities and associated foundations scored positive returns for a third straight fiscal year.
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Compared to five years ago when venture capital was producing stronger returns, there’s been reduced appetite for the asset class over the past few years, said Colin Hatton, principal for endowments and foundations at $1.8 trillion investment consultant NEPC.
Venture capital can still provide returns with strong upside, though clients should have a strong understanding of the associated risks of the asset class, he added.
“We would expect many higher education endowments to continue to invest in the space as they will require higher expected returns to meet potentially higher spending rates,” Hatton said.
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The real estate industry is continuing to recover, NEPC’s Hatton added. With that said, he noted subclasses such as industrials, warehousing and datacenters are seeing heightened interest from endowments and foundations looking to diversify.
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