University of Washington, Seattle, is looking to boost its allocation to hedge funds for its $1.9 billion in endowment and operating assets, said university financial officials.
For the $1 billion in endowment assets, trustees are considering pushing absolute-return strategies to the top of its 5% to 15% range from 10.5% as of Dec. 31, said V’Ella Warren, treasurer of the board of regents and assistant vice president-financial management.
Investments totaling $20 million in two new limited partnerships — one long-short and one arbitrage manager — probably will be proposed to the board in the next month or so, said Susan Ball, senior associate treasurer. She declined to name the managers. Another $20 million to $25 million likely will be handed out by year-end. Ms. Ball said she doesn’t expect the fund to have more than a dozen hedge fund managers, including the seven already on the books, unless endowment officials decide to pursue sector or regional funds. Also, university officials are considering ways to enhance fixed-income returns for the university’s $826 million in operating and reserve funds. The fund is looking at fixed-income arbitrage, quantitative and market-neutral strategies, Ms. Ball said. Cambridge Associates is assisting.
