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Lehigh investment strategy earns accolade

Peter Gilbert, Lehigh's chief investment officer, says the university’s endowment success can be traced back to a comprehensive portfolio review that was conducted more than a year ago.

Lehigh University is one of three finalists for a prestigious award bestowed annually by one of the most influential and well-read publications in the foundation and endowment world.

Foundation & Endowment Money Management magazine, which is dedicated to covering investment issues for foundations, endowments, hospitals and other nonprofit institutions, has nominated Lehigh for the 2011 Mid-Size Nonprofit of the Year Award. The other finalists in the category are Bucknell University and the Virginia Tech Foundation.

In announcing the nomination, Foundation & Endowment Money Management said Lehigh “bucked the trend of allocating to a few broad asset classes to focus on increasingly niche allotments.” By splitting up investments by risk level, the magazine said, “The fund now distinguishes asset classes that many of its peers aren't even invested in, such as emerging market debt denominated in local currencies.”

Peter Gilbert, Lehigh’s chief investment officer, says the university’s success can be traced back to a comprehensive portfolio review that was conducted more than a year ago.

“Part of that effort was not just to look at the endowment on an asset-only basis—in other words, how do you get the biggest possible return—but to look at the endowment in its relationship to the needs and risk tolerance of the university as a whole,” Gilbert says. “And out of that exercise, we came up with a new asset allocation that really lays out the kind of risk and return profile that is most appropriate for the university.”

Gilbert says there were five main themes that came out of the review process:

  • Taking a long-term view, which is consistent with the perpetual nature of the university.
  • Taking a highly diversified approach to expand the investment opportunity set and moderate risks.
  • Taking a global orientation toward investing, which aligns the investment strategy with Lehigh’s Strategic Plan.
  • Expanding Lehigh’s exposure to emerging markets and their future growth potential.
  • Using hedge strategies to help protect in a risky economic environment.

The winner will be announced on Sept. 18 at Foundation & Endowment Money Management’s 11th Annual Nonprofit Awards Dinner in Miami Beach.

Story by Jack Croft

Posted on Thursday, August 04, 2011

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