NEW YORK -- Investment managers looking for fertile marketing ground should target endowments and foundations. They will make approximately 4,800 managerial changes this year, 2,500 of which will be new hires, according to a recent study by the Spectrem Group, New York.
Sixteen percent of respondents to the study, "Managing Assets for Endowment and Foundations," indicated they likely would replace one or more investment managers in the next 12 to 18 months.
Of the $577 billion held nationwide by endowments and foundations, the study found that the largest 6% of the endowments account for 72% of the assets. Nearly 75% of endowments have assets of less than $10 million. A majority of these smaller funds use only one manager.
For reasons including performance concerns, asset allocation study results and asset growth, $32 billion in endowment assets will change hands this year, it said.
The study's findings are based on telephone interviews with 1,024 organizations. This is the first study of its kind Spectrem has conducted.