Center For Investment Excellence How Endowments and Foundations are tackling taxes, liquidity, and portfolio construction
Sep 8, 2025
Mack Kline, Head of Endowments, Foundations, and Healthcare at J.P. Morgan Asset Management, shares his expertise in navigating today's investment landscape. He discusses how reduced government funding is impacting universities and increasing their reliance on private funds. Kline highlights the growing demand for short-duration fixed income and liquid alternatives amidst liquidity challenges. He also explores innovative strategies like secondaries to manage private capital J-curves and the evolving role of hedge funds in achieving better returns.
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Government Funding Is Reshaping Budgets
- Government funding shifts and policy changes are materially reshaping university budgets and research planning.
- Mack Kline notes NIH grant pullbacks and targeted punitive impacts will force tighter cash flow management.
Private Distributions Have Collapsed
- Private alternatives now deliver far fewer distributions, reducing liquidity for endowments.
- Mack Kline cites distributions by year five falling to one-seventh of historical levels, pressuring portfolios.
Prioritize Short-Duration Liquidity
- Reallocate into short-duration fixed income and liquid vehicles to meet rising cash needs.
- Mack Kline recommends considering ETFs and short-term liquidity solutions as rates normalize.