Jay Yoder, director of investments at Smith College, Northampton, Mass., is overhauling the $950 million endowment. Under his plan, 25% of total assets will go into alternatives, with 10% to absolute-return strategies, giving the endowment its first exposure to hedge funds; and 15% to private equity, up from 5%. The endowment will commit $40 million to $50 million a year to private equity over the next five years. He also expects to add a new asset class of inflation hedges, to include real estate, energy, timber and inflation-linked bonds, which would total 10% of assets. Funding for both programs will come from U.S. stocks and bonds, with the amount to be determined later. In private equity, Smith has committed $10 million to Mohr Davidow Ventures early-stage venture cap fund and $15 million to Regiment Capitals distressed debt fund.
The endowment also hired Capital Guardian to manage $15 million in emerging market equities, replacing Templeton Worldwide. Mr. Yoder declined to give a reason for the move except to say he preferred Capital Guardian.