Baylor University, Waco, Texas, increased the alternatives allocation of its $750 million endowment to 40% of assets, from 30%. Trustees adopted a target allocation of 12.5% eachto private equity and hedge funds and increased the real estate target to 15%, said Jonathan Hook, CIO. The prior allocation to each asset class was 10%. The endowment's two consultants, Hammond Associates and Lowry Asset Consulting, recommended the increases. Mr. Hook said the change was made primarily to reduce the volatility of the portfolio and continue to enhance diversification. The object is to control risk while still earning equity-like returns, he added. Staff will meet the new targets over the next two years by looking for transaction-specific and opportunistic investments.