Purdue University - Message Points

1. You maintain a dedicated allocation to hedge funds/marketable alternatives and a 5% Absolute Return target.

Signals active appetite for low-correlation hedge strategies—well-suited to a concentrated, high-conviction, low-correlation manager.

Evidence

“Hedge Funds 414,591 374,865” “Marketable Alternatives include Hedge funds which are investments that employ a variety of strategies including US and global long/short, event and diversified arbitrage.” “Absolute Return 5.0% 2.5% 5.0% 1.6%”

2. You run a dedicated Emerging Markets sleeve using liquid commingled/NAV vehicles with daily redemption and no unfunded commitments.

A global, EM-capable boutique can plug into this sleeve with a high-conviction EM strategy that respects liquidity parameters.

Evidence

“Emerging Markets 174,153 159,020” “The University has emerging market investments held in commingled funds that are valued using NAV... These investments are able to be redeemed on a daily basis with no restrictions. There are no unfunded future commitments to these investments.” “Emerging Markets 159,020 130,411”

3. You maintain significant international equity exposure and permit ADRs, while requiring FX exposures be hedged to USD.

Aligns with a global/EM manager that actively manages currency risk and can deliver USD-hedged high-conviction portfolios.

Evidence

“International Equity 556,297 471,877” “Endowment equity managers may invest in... American Depository Receipts of foreign corporations.” “All currency exposures are to be hedged into the U.S. dollar unless otherwise approved by the University.”

4. You allocate via pooled/NAV vehicles and accept monthly/quarterly/annual liquidity with modest notice, preferring strategies without unfunded commitments.

Matches a commingled hedge fund structure offering regular liquidity and NAV-based reporting.

Evidence

“Net Asset Value (NAV). Certain investments are valued using the net asset value (NAV)... Those investments include pooled equities, marketable alternative assets, and partnerships.” “Redemptions may be made monthly, quarterly, or annually with notice periods ranging from 30 to 90 days.” “There are no significant restrictions on redemption and no unfunded future commitments to these investments.”

5. Your policy seeks added return from rebalancing uncorrelated asset classes and dedicates capital to risk-balanced/absolute return exposures.

A low-correlation, high-conviction hedge strategy can enhance diversification and complement your risk parity and absolute return sleeves.

Evidence

“adding the expected return from rebalancing uncorrelated asset classes.” “Risk Parity 20.0% 6.3% 20.0% 5.9%” “Absolute Return 5.0% 2.5% 5.0% 1.6%”

6. You emphasize making investment decisions solely on risk/return imperatives and invest with a long-term horizon.

Supports partnering with an entrepreneurial, owner-managed firm with a long track record and patient, high-conviction process.

Evidence

“making investment decisions solely to achieve the risk and return imperatives of the Endowment, not based on external stakeholder pressures.” “Funds not required to meet cash needs will be invested over a longer-term horizon.”

7. You cap any single active manager at 10% of the endowment, indicating a roster approach to specialized managers.

A smaller, focused manager can serve as a complementary sleeve without breaching concentration limits.

Evidence

“A single active manager or affiliated groups of active managers will not represent more than 10% of the total endowment’s market value.”