Real Assets and Liquidity
“Harvard University leaders were shocked to see more than $8 billion in asset value disappear from the institution’s endowment in 90 days.”
Alternative investment strategies continue to offer the potential for increasingly unique sources of enduring diversification. It may be helpful to examine the growth of alternatives.
According to the report, “Alternative investment strategies are included in a portfolio to enhance returns, reduce risk, or both. They are fundamental to the structure of the so-called endowment model of investing which concludes that long term asset pools … can outperform investors with shorter term time horizons by providing capital to less efficient, more complicated, and illiquid sectors of the capital markets.”
Click the PDF file below to view the Asset Allocations for the most recently reported fiscal year for the four largest endowments. The article by Real Asset Advisors concludes that “Investors should never confuse liquidity with safety and should view publicly traded real assets and pri-vate markets real assets as unique portfolio compo-nents that, when combined, provide inflation pro-tection, volatility reduction and return potential.”