Reed College - Message Points

1. They actively partner with external “best-in-class” managers across strategies and vehicles.

A concentrated, entrepreneurial, high-conviction hedge fund can position as a best‑ideas, boutique partner within their external manager roster and standard LP/commingled structures.

Evidence

“the asset class targets reflect a blend of long- term expected performance along with our ability to partner with best-in-class investment managers in those areas.” “The College diversifies its investments among various asset classes incorporating multiple strategies and external investment managers.”

2. They maintain a sizable absolute return allocation for diversification and downside protection and use hedge fund substrategies like equity long/short and global macro.

A low-correlation, high-conviction long/short manager with a long track record fits their absolute return sleeve’s role of diversifying equity risk and protecting in volatility.

Evidence

“Our absolute return component of the endowment, meant to diversify the overall portfolio and protect in times of volatility, once again produced a strong risk-adjusted return...” “The absolute return portfolio... consists of limited partnership interests in hedge funds whose managers have the authority to invest in various asset classes at their discretion, including the ability to invest long and short; the substrategies... include equity long/short... and global macro.”

3. They run a globally diversified program benchmarked to MSCI ACWI and highlight strong results from non‑U.S. managers.

A global mandate with emerging markets capability and concentrated best ideas can complement their international equity and global benchmarks (ACWI).

Evidence

“60% MSCI ACWI Equity Index & 40% Bloomberg U.S. Aggregate Bond Index” “Outside of the U.S., our equity- based managers successfully took advantage of resurgent markets, particularly within Europe, and produced strong absolute and relative performance.” “The endowment is a globally diversified portfolio invested across both public and private markets.”

4. They are flexible on liquidity (semimonthly to quarterly/semiannual) but manage to a 5% spending rule and monitor liquidity needs.

A boutique fund offering standard LP terms (e.g., quarterly liquidity) and reliable operations aligns with their mix of commingled funds and liquidity-aware portfolio construction.

Evidence

“Public equities $ 97,324,726 15 Days Semimonthly 9–15 Days ... Public equities 127,369,544 3 Months Quarterly 30–75 Days” “Sufficient liquidity in the endowment portfolio to meet the spending policy and operational needs... is also considered when making investment decisions regarding asset allocation.” “The policy on spending endowment income... is to spend 5% of the rolling 13-quarter moving average of the fair value or market value of the endowment.”

5. They closely track manager style tilts versus benchmarks (e.g., value and mega‑cap tech underweights) when assessing performance.

A concentrated, high‑conviction manager with clear, intentional style exposures and differentiated positioning can resonate with their style-aware oversight.

Evidence

“managers with a value orientation or simply an underweight to the largest technology stocks tended to underperform relative to the benchmark.” “our U.S. equity portfolio contributed the most to overall performance as managers took advantage of the seemingly unstoppable momentum within technology stocks.”

6. Decision‑makers have deep hedge fund experience and a history of building new investment teams.

An entrepreneurial, owner‑managed boutique with a long track record can align with leadership comfortable underwriting emerging/high‑conviction managers and hedge fund strategies.

Evidence

“He later joined PAAMCO, an alternative investment firm, and spent ten years researching hedge funds and managing portfolios for global institutions.” “Most recently, Erik served as a Director at Artisan Partners in San Francisco and was tasked with building new investment teams.”

7. They prohibit new investments in funds focused on fossil fuels and have been actively phasing out such exposures.

A high‑conviction strategy without a fossil‑fuel focus (and with ESG‑aware risk controls) aligns with their exclusions and can ease diligence hurdles.

Evidence

“Prohibit any new investments in public funds or private partnerships that are focused on the oil, gas, and coal industries, including infrastructure and field services.” “We can confirm that no new investments have been made in any public or private fund that is focused on the fossil fuel industry or any related sector.”