The board of regents for the $60 million University of Portland late last month hired Archstone Partners of New York and Genesee Investments of Bellevue, Wash., to manage $5 million and $2 million, respectively, in alternative investments, Vice President of Financial Affairs Roy Heynderickx said. The move stems from a recent 15% allocation to alternative investments.
Two years ago, the volatile bond market spurred the endowment to shift gears in its investment strategy and decrease its bond exposure to 25% from 40%, while eliminating a 2% mortgage allocation. These changes emancipated about 27% of the fund’s assets for other investments. The board also decided to bump up its international and domestic equities to 60% from 52% and invest up to 15% in alternative investments.
“It’s been clear that endowments have moved this direction over the last few years, but I think we have been slower in significantly increasing our exposure in alternatives,” Heynderickx said.
The board reviewed various studies that showed how other endowments had benefited from adding alternatives to their allocation recipes. Pending contract negotiations, Archstone’s and Genesee’s alternative portfolios would consist of partnerships for liquid securities or bond replacement styles of alternative investments. Funding for these managers came from reallocating the university’s investment mix.
During the past couple of years the board added Alliance Capital Management of San Francisco, to handle large-cap growth equities and Dresdner RCM Global Investors, San Francisco, and American Funds Group, Los Angeles, to manage international equities. –