Princeton University, Princeton, N.J., plans to drop half of its $14.4 billion endowment’s private equity managers as it shrinks investments in leveraged buyouts.
Private equity stakes rose to more than 35% of the university’s endowment after the 2008 financial crisis, exceeding the target of 23%, Chief Investment Officer Andrew Golden said in an interview. He plans to commit new money to 35 of the fund’s 70 private equity managers.
“Our mantra is fewer, better, stronger relationships,” Mr. Golden said. “It applies across the board but most significantly to buyouts,” the largest piece of the university’s private equity holdings, he said. Mr. Golden wouldn’t name the firms to be dropped by the school.
Princeton’s investments gained 15% in the year ended June 30, beating returns by Harvard University, Cambridge, Mass., and Yale University, New Haven, Conn., whose funds gained 11% and 8.9%, respectively.
Private equity generated a 19% return for Princeton in the past year, trailing the 43% gain by emerging markets stocks and the 23% increase by U.S. equities. Real assets, which include timber and real estate, was the worst-performing category, losing 1.6%.