University of Pennsylvania

1. You maintain a large Absolute Return/hedge fund sleeve and value low-correlation returns, with comfort around lock-ups and side pockets.

We offer a low-correlation, high-conviction strategy; your sizable absolute-return allocation and tolerance for hedge-fund liquidity terms suggest strong fit.

Evidence

“Absolute return 4,698,948 ... Range from monthly to annually and close-ended funds not available for redemption Lock-up provisions ranging from 0 to 5 years ... and side pocket investments” “Absolute return produced a solid absolute performance with limited market exposure.”

2. You explicitly diversify across different fundamental drivers and aim to smooth spending volatility, reducing reliance on long-only domestic equity/bonds.

A concentrated, best-ideas hedge strategy with low correlation can add diversification and help stabilize spending through different market regimes.

Evidence

“Second, Penn builds a portfolio that is diversified across different fundamental drivers of return.” “Over the years the University has strategically changed the A.I.F.’s asset allocation by increasing its diversification and reducing its dependence on long-only public domestic equities and bonds.”

3. You hire external managers across structures (managed accounts, mutual/private funds) and conduct rigorous NAV/GAAP due diligence.

As an entrepreneurial, owner-managed firm, we can accommodate your preferred structures and institutional reporting/valuation standards.

Evidence

“The Office of Investments ... [is] identifying, selecting and monitoring a variety of external investment managers to implement the strategic asset allocation set forth by the Investment Board.” “As a practical expedient, the University is permitted to estimate the fair value of an investment in an investment company ... using the reported net asset value (NAV). The University performs additional procedures, including due diligence reviews ... to ensure conformity with US GAAP.”

4. You run a global equity program with dedicated emerging markets exposure and have benefited from international/EM tilts.

Our global mandate with EM capability aligns with your explicit international and EM allocations and history of benefiting from these exposures.

Evidence

“Penn’s public equity portfolio returned 15.8%, benefiting from significant exposure to international and emerging market equities.” “Emerging market equities 1,398,031 1,398,031”

5. You target high long-term total returns to fund a ~5% spending policy and embrace an equity-oriented, stock-selection-driven approach.

A concentrated, high-conviction portfolio aiming for equity-like returns over time is designed to exceed spending and inflation, matching your objectives.

Evidence

“First, in order to achieve the high returns necessary to preserve purchasing power after spending, the AIF is invested with a strong equity orientation.” “The University’s Trustees set Penn’s spending policy, incorporating a target spending rate of 5%.”

6. You are comfortable with hedging, derivatives, and long/short exposure in manager portfolios.

Our low-correlation, risk-managed approach uses selective hedging/shorts where appropriate—tools you already permit and monitor.

Evidence

“Derivatives utilized by the University include futures, options, swaps and forward currency contracts and are reflected at fair value...” “Liabilities related to equity short positions ... are reported in Accrued expenses and other liabilities...”

7. You invest with a long time horizon and evaluate performance over multi-year periods versus composite benchmarks.

We have a long track record and a process built for multi-year compounding and benchmark outperformance, aligning with your evaluation lens.

Evidence

“Finally, Penn capitalizes upon the perpetual nature of the University to invest with a long time horizon...” “Longer measurement periods provide a meaningful context in which to evaluate investment performance...”