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Colleges turn from stocks and bonds to hedge funds

According to Bloomberg News, colleges like Harvard University and the University of Colorado are choosing fewer stocks and bonds, and investing more in hedge funds, timber forestland and real estate.

On average, college endowments have 8.6 percent of their assets in alternative investments, which also include venture capital funds and private equity firms. The average endowment rose 2.9 percent last fiscal year, with returns boosted in part by hedge funds, which now manage 6.1 percent of endowment assets.
According to Bloomberg News, colleges like Harvard University and the University of Colorado are choosing fewer stocks and bonds, and investing more in hedge funds, timber forestland and real estate.

On average, college endowments have 8.6 percent of their assets in alternative investments, which also include venture capital funds and private equity firms. The average endowment rose 2.9 percent last fiscal year, with returns boosted in part by hedge funds, which now manage 6.1 percent of endowment assets.

Bloomberg News also reported large endowments tend to be more aggressive with hedge funds, which are loosely regulated portfolios that bet on falling as well as rising prices of securities. Of the 39 endowments with more than $1 billion in assets, including all Ivy League schools, the average hedge fund allocation is 19.9 percent.