The top 50 European foundations have roughly 10% more assets than their top 50 U.S. counterparts but devote around 50% less money to charitable giving, according to new research by Watson Wyatt Worldwide.
The largest European foundations have e147 billion ($194 billion) in total assets vs. $175 billion for the largest U.S. foundations. But unlike the U.S. foundations, most European foundations still invest about one-third of their assets in founder or sponsor stocks, although eight of the top 50 invest more than 10% in alternatives such as private equity and hedge funds. Mirko Cardinale, senior investment consultant at Watson Wyatt, declined to name the eight funds. U.S. foundations and university endowments have moved more aggressively into alternatives, the research found. The average U.S. foundation allocates 9% to alternative assets and the average U.S. university endowment allocates 30% to these asset classes.
Mr. Cardinale said the tendency for European funds to place such a large percentage of assets in a single stock will likely change. There are consequences for risk management, said. The recent downturn in the market will also put pressure on European foundations to diversify, he added.