 | | (Jenna O'Malley/PitchBook News) | | | A year ago, university endowments were basking in bumper returns, which for some schools exceeded 50% for fiscal year 2021.
Now, they're facing their worst performance since the financial crisis: Endowments and foundations reported median losses of 7.8% for the fiscal year ended June 30, according to an estimate by Cambridge Associates. That's actually good news, since those results handily beat traditional stock-and-bond portfolios.
Thanks to their high exposure to private markets, endowments have been sheltered from the worst effects of the market sell-off. It will take several months, or even longer in the case of venture capital funds, for public and private asset prices to reach an equilibrium, assuming stocks and bonds remain depressed.
"Privates have done their job," said Matt Bank, a partner at Global Endowment Management, which acts as an outsourced chief investment office for endowments.
However, that job of smoothing out investment returns may simply delay inevitable losses. With each interest rate hike, the Federal Reserve alters the easy-money environment that shaped endowments' portfolios over the last decade.
Within private asset portfolios, some strategies are faring better than others. High exposure to VC helped some endowments outperform in prior years, but some of those same VC funds are now a drag on returns.
Recent losses add to systemic stressors, from rising costs to declining enrollment and the expectation for lower future returns. These challenges suggest that university endowments need to ensure their portfolios are ready for an investment and spending outlook that leaves less room for error.
This is The Weekend Pitch, and I'm James Thorne. You can reach me at james.thorne@pitchbook.com or on Twitter @jamescthorne. | | | | | | | |
| |
| A message from Masterworks | | |
| Stock market volatility passes bitcoin, but investors find "safe haven" here | | Industry experts never anticipated it could happen. But as stock market volatility raged, the VIX recently soared above the bitcoin volatility index. Because of these swings, more and more investors are looking for potential solutions outside of traditional markets.
Top financial minds are turning to real assets like blue-chip art – a $1.7 trillion asset class whose prices outpaced the S&P by 131% over the last 26 years. Masterworks makes it simple to invest in art. Their members enjoy unrivaled access to investments in institutional-grade works (think Picasso and Basquiat).
While others are panic selling, six of Masterworks' last seven strategic exits each realized a net return of +21.5%.* The only problem? Shares are limited. But PitchBook readers skip the waitlist here.
See important Regulation A disclosures. | | | | | | | |
| |
Europe's tech community strikes a defiant tone | |  | | (Piaras Ó Mídheach/Web Summit) | | | At Web Summit 2022 in Lisbon, a robotic arm waving a Ukrainian flag symbolized the pall that a war in Europe has cast over the global business community.
PitchBook editor Andrew Woodman captured highlights from the event, finding that tech leaders were eager to keep calm and carry on. Techstars CEO Maelle Gavet painted a silver lining on down rounds. Sarah Guo, founder of early-stage firm Conviction, reaffirmed the importance of scale to startups.
One investor declared that hope was a job requisite: "I am a venture capitalist, I have to be an optimist." | | | | | | | |  | | (Pixel-Shot/Shutterstock) | | | Both Stanford University's undergraduate and graduate programs top their respective rankings for the number of alumni who have founded VC-backed companies. How much venture capital funding have Stanford's entrepreneurs collectively raised to date?
A) $50 billion
B) $120 billion
C) $240 billion
D) $380 billion
Find your answer at the bottom of The Weekend Pitch! | | | | | | Flipping the crossover investor script | |  | | (jo.pix/Shutterstock) | | | Black Friday sales may still be a few weeks away, but some VC firms have been taking advantage of bargain prices for months. Firms like Lightspeed, Andreessen Horowitz and Accel have expanded beyond their usual strategies by scooping up discounted publicly traded stocks.
While those firms do not have an explicit mandate to invest in public markets, 5AM Ventures, a 20-year-old early-stage VC focused on biotech and life sciences, has explicitly broadened its investment scope to public markets.
In April, the San Francisco- and Boston-based firm raised a $300 million second opportunities fund that could invest in biotech startups as well as public shares.
To lead the public equities effort, 5AM has hired Anna Yaeger, who was previously a portfolio manager at Ally Bridge and Point72 Asset Management.
5AM believes that it has unique insights about certain publicly traded companies from when they were still venture-backed. The firm's latest opportunities fund gives it full discretion to capitalize on this knowledge.
While the firm sees many great deals in public stocks now, the sales could end at any time.
"In a market like this, we're very actively looking in the public market," said Kush Parmar, a managing partner at 5AM Ventures. "In a different environment, [the fund] might rebalance quite quickly."
—Marina Temkin | | | | | | Keep an eye out for these insights and research reports coming this week. - Q3 2022 Foodtech Update
- Themes from the SOSV Climate Tech Summit
- Q3 2022 US VC Valuations Report
- Key takeaways from the Cultured Meat Symposium 2022
- 2022 Global Fund Performance Report
- Q3 Carbon & Emissions Tech Update
| | | | | | Female founders forge ahead | |  | | (Gorodenkoff/Shutterstock) | | | Last week, we published the latest edition of our All In Report, which breaks down the data on female founders and investors in the US venture industry by city, sector and exit activity.
Good news: The data shows that female founding teams have not been disproportionately affected by current macroeconomic challenges, raising $32.4 billion through the third quarter of 2022—already more capital than any year prior to 2021, which saw record highs.
Bad news: Check-writing authority and decision-making at investment firms remain largely male-dominated.
—Priyamvada Mathur | | | | | | | | | | |
This edition of The Weekend Pitch was written by James Thorne and Priyamvada Mathur. It was edited by Chris Noble and Sam Steele.
Were you forwarded The Weekend Pitch? Sign up at pitchbook.com/subscribe. | | | | | |
| |
| | Since yesterday, the PitchBook Platform added: | | 29 Deals | 210 People | 47 Companies | | | | | | |
| |
No comments:
Post a Comment