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The Nation quotes Humphreys on the risky role of hedge funds in endowments


Hedge funds are playing an increasing role in the endowments of private and public universities, at the expense of students and workers, according to an article in The Nation. Author Astra Taylor writes that,  “experts I consulted estimate that over $100 billion of educational endowment money nationwide is invested in hedge funds, costing them approximately $2.5 billion in fees in 2015 alone.” While schools like The University of Washington are willing to pay fees of over $10 million a year to hedge funds, they balk at requests to increase worker pay to $15 an hour or to lower student tuition.

Taylor quotes Croatan Institute President and Senior Fellow Joshua Humphreys: ““Hedge funds, as they were initially conceived, have a potential role to play in a long-term endowment seeking to ‘hedge’ certain risks...but their arbitrarily high fee structures, the excessive compensation of their managers, and their deliberate evasion of taxes and transparency make hedge funds easy targets for stakeholders rightly concerned about the simmering crisis of higher education today.”

To learn more about Croatan Institute's research, visit the Institutional Accountability program page.

To contact Joshua Humphreys, send an email to josh [at] croataninstitute.org.


Source: Astra Taylor, “Universities Are Becoming Billion-Dollar Hedge Funds With Schools Attached,” The Nation, March 8, 2016.