Alternative Assets

While Macalester has adopted an asset allocation framework which focuses on three broad asset categories, the endowment portfolio invests in a variety of investments typically termed “alternative assets.” These assets represent “alternative” investment approaches to traditional stock and bonds.

Included in this category are illiquid private partnership interests in venture capital and leveraged buyout, as well as real estate, timberland, and oil and gas producing entities. We also include publicly traded real estate securities (REITS), and semi-liquid holdings with managers who engage in relative value trading strategies. These are generally long-term investments with limited liquidity and uncertain valuations until maturity. At the same time, these investments have equity-like returns, with low correlation to equity markets and relatively low return volatility.