Pummeled by the market, colleges study ways to rebuild hard-hit endowments - The Business Review (Albany):

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The will hire a consultant in the next few weekws to help selectmoney managers, but the liberal arts schoopl will continue its conservative investment strategy that to date has focuserd on a portfolio of cash, bondss and stocks. Saint Rose trustees and financed staff had considered hiring a consultant for the past year and a well before theeconomy soured. “The markert dislocation might have inspired us to get going alittled quicker,” said Daniel Nolan, chairman of Saint Rose’sa board of trustees. “We’ve had a pretty conservative said Nolan, a former executive and curren t managing directorof LLC, an Alban y financial advisement company.
Even with a the Saint Rose trustee investment committeed will continue to set investment polich and determineasset allocation—two areas in which the schoool is strong, said Nolan. “One of the blessingsx is that weare small. Unlike the big Harvards and Yalew that were doing less liquid we were more traditional and I think we are down a lot less as a Nolan said. The economic downturn and markeyt losses have hurt colleges acrosthe country. Saint Rose’w endowment lost $4.1 million during the last half of as the value shrankto $21.8 million at the end of The school—which lost about 16 percent of its endowment—fared much better than most colleges.
estimated in a recent reporg that many schools lost 25 to 35 percent of theid endowments during the second halfof 2008. “Az lot of colleges and universities started goiny into more aggressive investment philosophies to try and mimifc the returns of the largest saidJohn Nelson, a managinvg director at Moody’s. More colleges began relying less on stockas and bonds and more onhedged funds, private equity investments, venture capital and real estate investments. “Whiled painful to lose the gains of the lastthree years, it’w not really draconian yet,” Nelson said.
Moody’se predicted in January that highly leveraged colleges and thosr with large allocations in publicly traded equities were expected to suffer thebiggesft losses. lost at least 22 or $8 billion, of its $36.9 billion endowmenft last fall. Yale lost 25 percent as its endowment fellto $17 Yale money managers have been criticized in recent months for theirf portfolio management. The college chief investmentf officer declined to comment for this but the Ivy League college publishex a report this month defending itsinvestment strategy.
“In the midst of financial crises, some argue for higher allocationsto risk-free no doubt wishing after the fact for the now unattainabled before-the-fact protection,” school officials wrote. Yale stafgf say their equity investments and diversificatiojn philosophy caused its endowment to generateda 16.3 percent annual return for 10 yearxs through the end of That’s a mark, they say, they wouldd not have reached by investing in fixed-incom e assets, stocks and Investment strategy hasn’t changed much at in Troy The college has adhereed to what Chief Investment Officerf Walé Adeouson calls a diverse portfolio with a capital preservationj philosophy.