U.S. educational endowments and foundations, on average, increased their exposure to alternatives in 2002 at the expense of domestic equities, according to the third annual Commonfund Benchmarks Study. Alternative investments increased to an average of 32% of total assets in the latest study, up from 26% a year ago. Domestic equities declined to an average of 32% of total assets this year, down significantly from 37% in 2001. Fixed-income holdings remained at 21%, and international equity holdings stayed at 13% of assets, down a percentage point from last year.
The study found that 12% of respondents indicated they were required to cut into the corpus of their endowments in order to maintain spending levels; this was the first year the question was asked.