Investing
US Colleges Face Credit Risk Due to Their Private Equity Exposure
- Investments in private equity are growing in endowments
- Smaller endowments are among most vulnerable: Moody’s report
Private equity holdings accounted for nearly 18% of total endowment assets as of fiscal 2022 — or 30% when venture capital investments were included — according to the report
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US colleges and universities that have been boosting their allocations to private equity face increased credit risk, partly because these investments tend to be less liquid and more expensive, according to a report by Moody’s Investors Service.
Private equity holdings accounted for nearly 18% of total endowment assets as of fiscal 2022 — or 30% when venture capital investments were included — according to the report, which cited data from the National Association of College and University Business Officers. About 28% of assets were allocated to public equities.