They'll face it, they won't experience it though. But we've seen this movie before.
BREAKING: Wall Street execs who following college endowment investing say administrators at schools where the antisemitism is most strident could face a massive liquidity crisis if donations begin to dry up. The reason: Many endowments went so heavily into illiquid private equity…
— Charles Gasparino (@CGasparino) May 3, 2024
There are many ways for the endowments to raise cash, unlike the situation in the depths of the Great Recession.
Setting the stage, in June 2008, as the cracks were appearing but being ignored we posted "Come on Lucky Seven: CalPERS Bets on Alternative Investments" and "Pension Funds Drive Growth Of Alternative Assets. And: CalPERS Up 68% on Commodities; Down 31% on Real Estate. Action, Baby, Action!".
Followed by a somewhat snarky October 2008 post:
"Calpers Sells Stock Amid Rout to Raise Cash for Obligations"
This is hedge fund behavior, selling your most liquid investments to prop up the illiquid....
...At the same time PrivateEquityRealEstate is reporting the pension behemoth has found a fund with really good projections:CalPERS invests $400m in Sternlicht’s latest fund
The California pension has committed $400 million to Starwood’s $3bn Global Hospitality Fund II, which is targeting 20% IRRs. This summer, Sternlicht said he was rapidly expanding his latest hotel brand: the Baccarat, based on the famous crystals....
