Odd Lots Blackstone's King of Hedge Funds on Alt Investing Right Now
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May 1, 2025 
In this engaging discussion, Joe Dowling, the global head of multi-asset investing at Blackstone and former head of Brown University's endowment, shares his insights on the rise of alternative investments in collegiate finance. He explains why universities, including Yale and Harvard, have leaned heavily into alts and the pressures they're now facing. Joe dives into the long-term focus required for endowment investing, the significance of due diligence in evaluating hedge funds, and how strategies are adapting in the face of market volatility.
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Stress in Endowment Models
- Yale and other large endowments are facing stress as they consider selling private equity stakes.
- New leadership and tax changes force them to rethink their long-term strategies and liquidity.
Endowment Long-Term Outperformance
- Over 10 years, top quartile endowments outperform a 60-40 stock-bond portfolio by around 160 basis points annually.
- Small differences in long-term compounding produce enormous financial benefits for endowments.
Research Before Investing
- Instead of chasing every pitch, conduct deep, focused research on niche market segments.
- Invest contrarianly by exploring areas others neglect to uncover real alpha opportunities.
