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School Endowments Wild About Hedge Funds

Some university endowments have gone hog-wild over hedge funds, with allocations that far exceed the single-digit percentages of all other institutional investors.

Some university endowments have gone hog-wild over hedge funds, with allocations that far exceed the single-digit percentages of all other institutional investors. Hope you're sitting down for this: According to figures from National Association of College and University Business Officers, The College of Wooster in Ohio has a whopping 82% of its portfolio in hedge funds. Following the leader were Alfred University (79%), Marine Biological Laboratory (65.5%) and Yeshiva University (65.4%). Infovest21, which tallied the data, said, overall, 431 endowments put money in hedge funds in 2005, up from 390 in2004, with six of them allocating 50% of their portfolio, 33 putting in more than 30% and 90 setting aside 20% or more. Infovest21 also found that seven increased their allocations to hedge funds, while three cut them. The hedge fund managers mostly likely to capture the fancy of endowments, according to Infovest21, are Och Ziff Capital Management, Indus Capital Partners, Standard Pacific Capital, Farallon Capital Management, Tudor Capital and Maverick Capital Fund. The favorite among funds of hedge funds included Commonfund, Private Advisors, Pine Grove Associates, Arden Asset Management and K2 Advisors. The secret to success: "If you have a relatively conservative strategy that is truly hedged and good overall business acumen, endowments will be attracted to you," a manager with one of the favored funds told Infovest21.

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