Like endowments, pensions’ investments in private assets made the difference in performance. But a global 60-40 benchmark, one commonly used by pensions, returned 5.8 percent. Pensions had a median return of 5.2 percent for the first three quarters of the 2023 fiscal year, MPI estimated. public pensions are in a similar situation to endowments. The Cambridge Associates Real Estate index return is down 0.56 percent during the same period. The Cambridge Associates Venture Capital index was down 7.31 percent and Cambridge Associates Private Equity Index was up 0.62 percent during the fourth quarter of 2022. To estimate performance, MPI used the recently released Cambridge Associates’ Private Benchmarks preliminary estimates for the fourth quarter of 2022. Meanwhile, a global 70-30 benchmark, the standard used for endowment performance, is up 6.1 percent during the same period. MPI estimated the median Ivy League endowment return so far for the 2023 fiscal year is 1.9 percent. regulators, who use its tools to surveil funds, he said. When things don’t add up, there is a red flag.” Among MPI’s customers are U.S. (Some investors are already seeing more sober private asset valuations and others are also changing how they assess private asset managers.)Īnd “from returns you can glean a lot of information: risk, the skill, the trend, the style drift, you name it,” MPI chief exectuive Michael Markov said. The growing allocations to private equity and venture capital that boosted returns in previous years is now pushing the median pension and endowment performance below the allocators’ benchmarks, MPI says. Public markets have rebounded in 2023 - the S&P 500 index is up 9.9 percent and the Nasdaq Composite index has returned 22.6 percent - and helped college endowments and public pensions post gains over the first three quarters of the 2023 fiscal year.īut those gains still aren’t enough to overcome markdowns on private assets. Asset classes that were once the darlings of public pension fund and college endowment investment portfolios are now hampering returns, according to projections from Markov Processes International, a provider of software and services to analyze investment performance and risk.
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