From a recent article “Cornell Cuts Back On Hedge Funds”:
[March 12, 2009] Hedge funds have helped make the members of the Ivy League among the wealthiest institutions in the world. But in the wake of tremendous losses last year, one of the Ancient Eight is turning its back on the asset class. Cornell University plans to cut its hedge fund investments by a quarter, chief investment officer James Walsh told Bloomberg News. The move comes as Cornell seeks to reduce its endowment costs by 15%. Cornell’s endowment, which currently allocates about 15% of its assets to hedge funds, lost 27% in the second half of last year. While Cornell still boats one of the 20 largest endowments in the U.S., with almost $4 billion, the huge losses have forced the Ithaca, N.Y., school to postpone construction projects, seek staff cuts, and increase both tuition and enrollment. “We are de-emphasizing the hedge funds and more emphasizing the long-only managers,” Walsh told Bloomberg. He said that, given their returns, Cornell can no longer justify paying high hedge fund fees. Walsh said that Cornell will increase its allocation to cash, distressed investments and corporate bonds. He would not say from which hedge funds Cornell was redeeming its investments.
You just know he most likely had NO trend following investments. Too smart for that I guess. The hedge funds they did have? Probably leveraged long only nonsense that blew up. In all seriousness do the good people at Cornell even realize how incompetent their guy James Walsh is? Long only is his new strategy? Walsh sounds like a guy who has just lost his life savings at the craps tables, has $5000 left, and is betting it all. Attention: Earth to people at Cornell — wake the f*** up!