Investing in Your Alumni: Endowments' Investment Choices in Private Equity

Roland Füss, Stefan Morkoetter and Maria Oliveira
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Roland Füss: University of St. Gallen and Swiss Finance Institute
Stefan Morkoetter: University of St. Gallen
Maria Oliveira: University of St. Gallen

No 23-65, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We investigate the role of alumni ties in university endowments' decision to invest into private equity funds. Based on a sample of 1,590 commitments made by 189 U.S. endowments into 613 funds during the period of 1995 to 2017, we show that endowments are more likely to invest into funds that are managed by the alumni of their own alma mater. This finding is more pronounced for less prestigious and less private equity experienced university endowments. Thus, our results are not only dominated by institutions with a larger proportion of active alumni in the private equity industry. Furthermore, we observe that alumni ties are not associated with better performance compared to other endowment investments where such a tie does not exist.

Keywords: alumni ties; fund managers; investment choice; private equity; university endowment (search for similar items in EconPapers)
JEL-codes: G11 G24 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2023-08
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2365

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