Louisiana State University's LSU Foundation, Baton Rouge, will conduct a shortlist search for a hedge fund-of-funds manager and emerging markets and private equity managers for the school's $325 million endowment, said Philip Griffith, investment director. The investments are the result of an asset allocation study conducted by consultant CRA RogersCasey, which concluded that the new investments could give the endowment slightly higher returns with lower risk.
The consultant recommended allocating 9% of total assets to a hedge fund-of-funds manager, 7% to emerging markets and 6% to private equity. Funding for hedge funds will come from reducing fixed income, and funding for emerging markets and private equity will come from reducing equity holdings. The current asset allocation is about 65% equity and 35% fixed income; Mr. Griffith said he does not expect the foundation to terminate any managers.
CRA RogersCasey is conducting the search, and Mr. Griffith did not provide a timeframe for when managers will be hired.