Advising Endowments and Foundations
In this issue of Research Quarterly, Cerulli Associates looks at the endowment and foundation market, specifically examining asset allocation trends, asset class demand, and the role of consultants and advisors. Large higher education endowments have been looked to as leaders in asset allocation, although their approach recently has come into question. However, emerging evidence indicates that endowments may again be leaders in environmental, social, and governance (ESG) investments, another trend that is beginning to trickle into other institutional and retail channels. These nonprofit clients require a specialized approach from advisors, consultants, and asset managers. First, these asset pools must push off a certain level of income each year to support the budgets of the related institutions. Just as importantly, their nonprofit status leads to decision-making with varied levels of expertise from various constituents. These unique characteristics can make these markets challenging but lucrative for those advisors and consultants who appreciate the unique dynamics.
