After 2008, when they were burned by financials, SWFs are likely to stick with a recent trend toward natural resources.
Avoiding funds of funds, the New York State Common Retirement Fund is increasing its allocation to hedge funds in hopes of excess returns.
With poor returns and liquidity issues, endowments—heavily reliant on private equity in the past—say they will lower allocations to this alternative asset class.
Russell Read, the fund’s CIO from 2006 until 2008, defends moves he and the fund made into commodities, emerging markets, and private equity.
America’s third largest endowment will make cuts more quickly than many of its peers in hopes of returning to growth sooner.
The director of global research at America’s seventh largest public pension is predicting that many of his peers will turn to gold to hedge against currency devaluation and inflation.
Following in the footsteps of Harvard and others, Rice has established the Rice Management Co., which will look after the school’s $3.6 billion endowment.
Although the fund was known to be down 27% on the year, the recently released annual report shows that the University lost big on interest-rate swaps and real estate in fiscal 2009—and that the University also was, unusually, investing much of its General Operating Account alongside the rest of the endowment.
Recent moves by the China Investment Corporation and the Qatar Investment Authority highlight sovereign funds’ dual role as stabilizers and profiteers.
Although the university is claiming that it doesn’t need the cash, Stanford has initiated a sale of up to $1 billion in private equity stakes in the secondary markets.
Having lost 20% of its value, the mighty Bill & Melinda Gates Foundation has turned to a novel investment approach to retain capital while still putting it to work.
The IFC—a member of the World Bank group—is planning on working with SWFs and pension plans to create a $1 billion fund for investments in emerging and frontier markets.
All SWFs were not created equal, recent activity shows.