The $850m endowment fund of the world famous Juilliard School of dance, drama and music in New York is seeking to increase its exposure to Asia from 12% to 20% by the end of Q1 next year.
The endowment is particularly looking at Asian hedge fund managers and private equity managers for further investments, Apurva Mehta, director of portfolio investments at Juilliard stated during the Hedge Funds World Asia conference in September.
The school’s hedge fund investments in Asia are predominantly in long/short equity but as the investment familiarizes itself with the region, it will look to add more event driven, distressed, private equity and some country focus funds, revealed Mehta.
“We have 12% of our entire portfolio across Asia, of that 6% is direct and 6% is indirect through large hedge funds as well as private equity exposure. We are growing that piece of our portfolio,” said Mehta.
Originally, the endowment’s allocations to Asia was through global multi-strategy managers with slices of investments in Asia, however, Mehta revealed that the school has been gradually investing directly.
Meanwhile, although Asia has become a hot destination for global hedge funds, Juilliard will focus on the local talent. Mehta stated: “I would say we are going to do it through managers native to the region as opposed to some of these larger funds that are opening up offices or hiring teams in Asia. We are increasing our exposure because we want local on-the-ground tenure experience.”
Like many endowments, the Juilliard School has a high proportion of its investments in hedge funds – around 40%. Since inception, its hedge fund composite has returned around 13% net of fees outperforming most major indices. “So we are comfortable with hedge funds from a risk return perspective and see our allocation growing – by the end of next year it will likely be 50% [of the portfolio,” he said.