Outperform

"e;University endowment managers have generally outperformed the market benchmarks. However, their knowledge has not been well documented in any book. This book fills that gap and should be of significant help to all those who want to learn from extensive interviews with a number of endowment managers."e; PREM JAIN, McDonough Professor of Accounting and Finance, Georgetown University Learn how higher education's largest endowments consistently achieve higher investment returns than the overall market. The Chief Investment Officers who oversee the top academic endowment funds manage over $400 billion in total assets. Over the last ten years (1999 2009), large endowments returned an average of 6.1%, compared to the S&P 500 index average of 2.22%, an outperformance difference of over 8%. With the recent sharp economic downturn, and a decade of inflation-adjusted flat returns in the overall equities market, institutional and individual investors alike are looking to endowments for proven strategies for improving the performance of their portfolios. Outperform: Inside the Investment Strategy of Billion Dollar Endowments interviews top CIOs from leading endowments, to detail how they consistently outperform the market, what they predict for the coming years, and how small investors can employ their investment philosophies.

"University endowment managers have generally outperformed themarket benchmarks. However, their knowledge has not been welldocumented in any book. This book fills that gap and should be ofsignificant help to all those who want to learn from extensiveinterviews with a number of endowment managers."--PREMJAIN, McDonough Professor of Accounting and Finance, GeorgetownUniversityLearn how higher education's largest endowments consistentlyachieve higher investment returns than the overall market.The Chief Investment Officers who oversee the top academicendowment funds manage over $400 billion in total assets. Over thelast ten years (1999-2009), large endowments returned anaverage of 6.1%, compared to the S&P 500 index average of2.22%, an outperformance difference of over 8%. With therecent sharp economic downturn, and a decade of inflation-adjustedflat returns in the overall equities market, institutional andindividual investors alike are looking to endowments for provenstrategies for improving the performance of their portfolios.Outperform: Inside the Investment Strategy of Billion DollarEndowments interviews top CIOs from leading endowments, todetail how they consistently outperform the market, what theypredict for the coming years, and how small investors can employtheir investment philosophies.

Preface ixAcknowledgments xiiiPART I ACADEMIC ENDOWMENTSChapter 1 Academic Endowments Overview 3The World of Endowments 4History of Endowments 6Academic Endowments in the Context of the Investment World 7Large Academic Endowments 7Implications for Individual Investors 17Summary 19Notes 20Chapter 2 Historical Endowment Performance 21Investment Returns 22Asset Allocation 28Summary 30Notes 31Chapter 3 A Look Inside Endowments 33Endowments Are Different 33Endowments Define Asset Classes Broadly 35Endowments Achieved a One-time Sophistication Improvement 36Endowments Are Nimble 36Endowments are Evaluating Approaches to Managing Tail Risk 37Endowments also Manage Working Capital 38Endowments Manage Liquidity Carefully 39Endowments are Changing their Approach to Performance Measurement 41Summary 41PART II PUBLIC UNIVERSITIESChapter 4 Jonathan Hook, Chief Investment OfficerThe Ohio State University 45Chapter 5 Guy Patton, President and CEOThe University of Oklahoma Foundation 57Chapter 6 Bruce Zimmerman, Chief Investment Officer University of Texas Investment Management Company 69PART III PRIVATE UNIVERSITIESChapter 7 James H.C. Walsh, Chief Investment Officer Cornell University 81Chapter 8 Sally J. Staley, Chief Investment Officer, and Anjum Hussain, Director of Risk Management Case Western Reserve University 95Chapter 9 Mary Cahill, Vice President of Investments and Chief Investment OfficerEmory University 113Chapter 10 Don Lindsey, Chief Investment OfficerGeorge Washington University 125Chapter 11 Scott W. Wise, PresidentRice Management Company 141Chapter 12 James (Jim) Hille, Chief Investment OfficerTexas Christian University 153Chapter 13 Jeremy Crigler, Chief Investment OfficerTulane University 167PART IV ADVISORS AND MANAGERSChapter 14 Sandy Urie, President and Chief Executive Officer, and Celia Dallas, Co-Director of Research and Managing DirectorCambridge Associates 181Chapter 15 Lyn Hutton, Chief Investment OfficerCommonfund 199Chapter 16 Thruston Morton, CEO and Chief Investment OfficerGlobal Endowment Management 217Chapter 17 Mark W. Yusko, CEO and Chief Investment OfficerMorgan Creek Capital Management 231Chapter 18 Rafe de la Gueronniere, PrincipalNew Providence Asset Management 247Chapter 19 Bob Boldt, Chief Executive OfficerBoldt Ventures 267Conclusion Concepts for Individual Investors 281Lessons for Individual Investors 281Trends 288Predictions for Endowments 292Summary 294Glossary 297About the Authors 307Index 309