×

Purdue University's Endowment Gets Defensive: CIO

With continued uncertainty in the market, one university endowment has chosen to play zone defensive and has increased more of its portfolio allocation into hedge funds.

purdue_university_200.jpg
Source: Purdue University

"A year ago we were at about 15 percent and today we are approaching our 25 percent investment policy target" in hedge funds, Scott Seidle, chief investment officer and senior director of investments for Purdue University, told CNBC Tuesday.

"It may be another 12 months before we kind of feel better about the financial markets and their stability and uncertainty and volatility," he added.

Last year, Purdue's endowment saw a 14 percent return. Total funds under management including endowed funds, trusts, annuities and cash totaled $3.12 billion.

"The market has certainly been on a tear-up and we think with all that is happening—with the wind-down of government intervention, what's happened in Greece even today—we think having talented managers in the portfolio that can really navigate our assets are very important," Seidle said.

In addition, he said the endowment portfolio is intended to be about 2 percent in public real estate investment trusts and 5 percent in private real-estate investments. "We certainly took some of our public exposure off-the-table because of the run that they had been on, so we think there is a market correction coming. We think they're certainly overvalued and way above probably two times standard deviation."

Follow Strategy Session on Twitter: @CNBCStrategy


Watch CNBC's "The Strategy Session" weekdays at Noon ET.