University of New Hampshire

1. Openness to direct, niche hedge fund managers alongside top-tier fund-of-funds

Signals willingness to back specialized/boutique, entrepreneurial managers—good fit for a small-AUM, owner-managed, high-conviction hedge fund.

Evidence

“Flexible Capital 13% 19% Direct-niche hedge fund managers coupled with top-tier fund-of-funds managers.” “Flexible Capital 28% Direct-niche hedge fund managers coupled with top-tier fund-of-funds.”

2. Expectation that active managers deliver benchmark outperformance over a market cycle, with tolerance for interim volatility if 10-year goals are met

Aligns with a concentrated, best-ideas, high-conviction strategy that targets excess net returns and has a long, cycle-tested track record.

Evidence

“Active investment managers are expected to provide an appropriate excess return, net of fees, over a normal portfolio or a relevant index, e.g., the S&P 500, ideally placing them well into the second quartile of managers with similar objectives over a market cycle.” “For this reason, the Fund is designed to tolerate short- and intermediate-term volatility, provided that long-term (10-year) returns meet or exceed the investment objective.”

3. Meaningful global and emerging markets orientation

Supports a global/international mandate with EM capability; they benchmark to MSCI EAFE and use EM indices, indicating demand for managers who can add value internationally and in EM.

Evidence

“The Fund’s current long-term, strategic asset allocation targets are presented in the following table... Global Public Equity 50 40-70” “Another fund seeks to exceed returns on the MSCI EAFE (Europe, Asia, Far East) Index.” “One fund in this type employs the MSCI Emerging Markets Index to inform its stock selection.”

4. Use of hedge funds/flexible capital to achieve market-comparable returns with lower expected volatility and diversification benefits

A low-correlation, risk-managed return profile fits their flexible capital sleeve and diversifying hedge fund allocations (equity hedge, event-driven, distressed).

Evidence

“Flexible capital strategies are employed to offer market-comparable returns with lower expected volatility.” “Hedge funds: - - - - Distressed/Restructuring 9,002 - - - 9,002 Equity Hedge 12,341 - - - 12,341 Event-Driven 23,619 - - - 23,619”

5. Preference for seasoned external managers with consultant and committee oversight

They rely on external managers and an advisor-led process; a specialized hedge fund accustomed to institutional due diligence and consultant engagement can plug in smoothly.

Evidence

“They are managed by seasoned external investment managers and are overseen by talented industry professionals on our investment committees and at our investment consultant.” “Prime Buchholz and Associates of Portsmouth, New Hampshire serves as investment advisor to the Foundation’s Asset Allocation Committee.”

6. Integrated ESG preference and significant ESG-qualified exposure

For managers with ESG integration and reporting, this is a clear hook; they maintain a dedicated ESG pool and apply sustainable principles across decisions.

Evidence

“As of June 30, 2024, ESG-qualified investments comprised about 63% of the total Foundation assets under management.” “The foundation’s commitment to incorporating sustainable investment principles is a fully integrated component of its investment decision- making process.”

7. Long-term, total-return orientation focused on real returns net of fees and inflation

A long, cycle-tested track record and patient, high-conviction approach align well with their perpetuity mandate and emphasis on durable, net-of-fees outcomes.

Evidence

“The Foundation has a long-term investment horizon with relatively low and predictable liquidity needs.” “It features a diversified mix of fund managers designed to yield a long-term real return, net of fees and inflation, in excess of distributions.”