Princeton plans no changes to PE allocation

Princeton’s $14.4bn endowment will cut back on the number of GP relationships, setting a ‘higher bar’ for re-ups, says CIO Andrew Golden.

Princeton University remains committed to private equity and being the “best partner”, but will work “over time” to cut down on the amount of private equity mangers with which it works.

The endowment, which has invested in private equity for “decades”, has no plans to change its 23 percent allocation target to the asset class, according to the endowment’s chief investment officer Andrew Golden.

But the endowment will, like many other institutional investors in the US, cull the ranks of its managers, he said.

“[We] desire over time to have a smaller roster,” Golden said. “As renewals come up, we’re setting a higher bar so we can concentrate on fewer better stronger [managers].”

Andrew
Golden

The decision to end a relationship with a particular manager doesn’t depend only on performance, he said.

“Our analysis is always multi-dimensional,” Golden said. “It’s not as simple as what was your number in the last fund.”

Many institutions, including Harvard University, are paring down their relationships with private equity managers. Harvard, which has a $27.4 billion endowment, is working to reduce the number of relationships it has with private equity managers to counter an “overcrowding” in the market, Jane Mendillo, president and chief executive officer of the Harvard Management Company, said in the endowment’s fiscal 2010 performance report in September.

Princeton’s endowment earned a 14.7 percent annual return on its investments in the fiscal year that ended 30 June, 2010.