Notre Dame 'Earns Stripes' in Current Market: Endowment Chief
With six wins and no losses to date, the University of Notre Dame's football team is off to one of its best starts in years.
Yet unlike the football team's ups and downs in recent years, Notre Dame's endowment chief said Monday that the school's portfolio has been consistently successful.
Scott Malpass, the university's chief investment officer, told CNBC's "Squawk Box" that over the past decade, "We've earned returns of around 10 percent, where the S&P has been three or four percent."
Since taking over in 1988, Malpass has ballooned the endowment from $443 million to nearly $7.5 billion. He attributes much of this to good fundraising, and the booming stock market that punctuated the late 1980s and 1990s.
The past decade has been more challenging, but Malpass said "this is where we really earned our stripes." Having a good organization with access to good managers has paid off for the fund, he added.
"Historically, we we're very fundamentally driven, thinking about the best managers who have a real definable skill that we can pinpoint and have built great investment organization, " Malpass said. Today, they think more about the macro environment following the financial crisis and the ongoing debt problems in Europe and the U.S.
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That has helped Notre Dame's endowment outperform in the latest fiscal year, while many others struggled.
"If you had a lot of emerging market exposure, emerging markets got whacked last year, " he noted.
Notre Dame has emerging markets exposure. However, unlike some endowments that use passive managers and exchange-traded funds, the endowment uses active managers for its emerging market investments.
"Our composite for all our emerging markets managers for the fiscal year was down one percent, while the index was down 17 percent, " Malpass noted.
The endowment is taking advantage of the declines to increase its exposure to emerging markets and has added fresh capital to new geographies, such as sub-Saharan Africa. He noted that the markets in these regions are cheap, and have great companies with young populations and a rising middle class. (Read More: Mark Mobius Sticks With South Africa Despite Turmoil .)
"Even though the standard of living is still very poor, there are a lot more consumers and a lot larger companies available to investors than people realize, " he said.