Purdue University Endowment, West Lafayette, Ind., hired Valinor Management and Conatus Capital to manage a total of just under $20 million in global long-short hedge funds, said Scott Seidle, chief investment officer.
Each manager got less than $10 million, Mr. Seidle said, declining to be specific.
The moves completed the $2 billion endowment’s effort to reach its 25% target allocation to hedge funds, all direct, he said. The endowment has no plans for further allocations to the asset class, he said.
The endowment expects the new allocation will reduce risk. “We will have to wait and see” about the return, he added.
The endowment raised its hedge fund allocation from 15% last year because of “continued volatility and uncertainty in the market,” Mr. Seidle said. “We wanted the assets with talented managers who would navigate” those conditions. The endowment reduced its domestic and international developed markets equity allocations five percentage points each, to 18% and 13%, respectively, to increase the hedge fund allocation.
Funding for the two managers came from reducing assignments of U.S. equity and international equity managers, Mr. Siedle said, declining to provide details. No managers were terminated, he added.
The changes were the result of an asset allocation study the endowment completed last year.
The rest of its allocation remained the same at 15% fixed income, 10% combined venture capital and private equity, 7% each real estate and natural resources, and 5% emerging markets equity.
Investment consultant Cambridge Associates assisted in the searches and the asset allocation study.
