Odd Lots
Blackstone's King of Hedge Funds on Alt Investing Right Now
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.
47:11
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Quick takeaways
- College endowments are reassessing their heavy investments in alternatives like private equity due to changing market conditions and economic pressures.
- Proposed tax increases on wealthier endowments may compel institutions to focus on tax-efficient investments to sustain returns amid rising liabilities.
Deep dives
The Changing Landscape of Investment Strategies
In recent months, the investment strategies of private credit and multi-strategy hedge funds have come under scrutiny as market conditions shift. Concerns are rising that an economic slowdown could trigger significant issues within private asset markets, particularly affecting the previously booming sectors of private equity and hedge funds. As various institutions, including premier organizations like Yale, consider liquidating private equity stakes in response to changing financial environments, this reaction highlights a broader trend where withdrawal from illiquid investments may be necessary. The emerging narrative positions these asset managers as needing to rethink their strategies in light of external economic pressures.
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