5 ms·

I could be misremembering this, but wasn't there some drama about five years ago about schools literally investing a lot of their endowment and the like in hedg

I could be misremembering this, but wasn't there some drama about five years ago about schools literally investing a lot of their endowment and the like in hedge funds?

finolex1 5y ago
I think it is pretty common for schools to let hedge funds manage a large portion of their endowment. Not sure what the reason for drama is.
- tombert 5y ago
  I think it leaves a bad taste in people's mouth since hedge funds are typically a bit riskier than a savings account.
  - finolex1 5y ago
    Hedge funds have targets for volatility and rates of return that they try to meet. Endowment managers take such metrics into account when allocating money across different asset classes. They are most certainly not giving away their entire endowment to buy GME. The only controversy I can see is whether the returns provided by hedge funds outweigh the management/performance fees they charge.
    - tombert 5y ago
      That's fair, as I said I barely remember the details of this, and I know very very little about how these kinds of investments work.
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  - carnitine 5y ago
    A savings account is not open to an endowment and will be eroded by inflation. Any university endowment will need to be invested in something riskier.
    - ceilingcorner 5y ago
      Surely there is a stable middle ground between a savings account and a hedge fund?
- maverick-iceman 5y ago
  Then hedge funds turn back around and put the money coming from Universities back into MIT kids hands. It's seriously telling of why Western economies don't grow like they used to. Money became a hot potato business where nobody has the arrogance to say "Ok, I will do this on my own" The and Bill Gates and Mark Zuckerberg of today aren't leaving Harvard anymore.
robmiller 5y ago
I think the story went: 1. Hedge funds donate to endowments 2. Endowments invest back into hedge funds 3. Hedge funds list endowments as investors in their marketing 4. Clients invest with HFs thinking endowments must have done their due diligence.
- DiggyJohnson 5y ago
  This has to potential to be "chilling."
adnmcq999 5y ago
When I was a student at some big state school in 08-09 I overheard some profs talking amongst themselves about how the endowment had fallen by a third. I really wasn’t keyed in at the time to stonks- I was just trying to party and pass my classes, but my ears stood up for that one. I guess almost any large store of money is going to be invested in the market tho

I could be misremembering this, but wasn't there some drama about five years ago about schools literally investing a lot of their endowment and the like in hedge funds?

finolex1 5y ago

I think it is pretty common for schools to let hedge funds manage a large portion of their endowment. Not sure what the reason for drama is.

tombert 5y ago
I think it leaves a bad taste in people's mouth since hedge funds are typically a bit riskier than a savings account.
- finolex1 5y ago
  Hedge funds have targets for volatility and rates of return that they try to meet. Endowment managers take such metrics into account when allocating money across different asset classes. They are most certainly not giving away their entire endowment to buy GME. The only controversy I can see is whether the returns provided by hedge funds outweigh the management/performance fees they charge.
  - tombert 5y ago
    That's fair, as I said I barely remember the details of this, and I know very very little about how these kinds of investments work.
    - deleted 5y ago
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    - deleted 5y ago
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    - deleted 5y ago
      [deleted]
- carnitine 5y ago
  A savings account is not open to an endowment and will be eroded by inflation. Any university endowment will need to be invested in something riskier.
  - ceilingcorner 5y ago
    Surely there is a stable middle ground between a savings account and a hedge fund?
maverick-iceman 5y ago
Then hedge funds turn back around and put the money coming from Universities back into MIT kids hands. It's seriously telling of why Western economies don't grow like they used to. Money became a hot potato business where nobody has the arrogance to say "Ok, I will do this on my own" The and Bill Gates and Mark Zuckerberg of today aren't leaving Harvard anymore.

robmiller 5y ago

I think the story went: 1. Hedge funds donate to endowments 2. Endowments invest back into hedge funds 3. Hedge funds list endowments as investors in their marketing 4. Clients invest with HFs thinking endowments must have done their due diligence.

DiggyJohnson 5y ago
This has to potential to be "chilling."

adnmcq999 5y ago

When I was a student at some big state school in 08-09 I overheard some profs talking amongst themselves about how the endowment had fallen by a third. I really wasn’t keyed in at the time to stonks- I was just trying to party and pass my classes, but my ears stood up for that one. I guess almost any large store of money is going to be invested in the market tho