Smaller university endowments: team characteristics, portfolio composition and performance

Mimi Lord

Qualitative Research in Financial Markets, 2014, vol. 6, issue 1, 4-32

Abstract: Purpose - – The paper aims to help explain how certain smaller university endowments are able to provide investment results that are more typical of much larger endowments. Investment teams' characteristics and risk-reward perceptions are examined in relation to portfolio composition and performance. Design/methodology/approach - – This exploratory study uses a grounded-theory approach consisting of 20 in-depth interviews of financial officers at US colleges and universities with assets between $100 million and $200 million. Ten were conducted from the top performance quartile and ten from the bottom quartile. Interviews were transcribed and coded; afterward, emerging themes and constructs were identified. Objective investment performance over a ten-year period was employed from a well-known industry survey. Findings - – Top-performing endowments were described as having endowment teams with greater investment expertise, efficacy, decision-making independence and learning commitment than teams from the low-performing endowments. Teams from top-performing endowments assessed alternative investments more favorably and made greater portfolio allocations to them as compared to teams from low-performing endowments. Research limitations/implications - – Because of the chosen research approach, the research results may not be generalizable. Practical implications - – The paper includes implications for colleges and universities in the management of their endowments, and particularly in the selection of committee and other team members. Originality/value - – The paper is original in exploring certain team characteristics and practices of institutional investment decision-makers and their relationship to portfolio composition and performance.

Keywords: Portfolio diversification; Risk perception; University or college endowment; Investment performance; Learning commitment; Team efficacy and collective agency (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:qrfmpp:v:6:y:2014:i:1:p:4-32

DOI: 10.1108/QRFM-07-2012-0021

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