We are delighted to share that a recent CEFS research paper titled “Are Unfunded Capital Commitments a Side Show? Evidence from University Endowments” authored by Prof. Reiner Braun (CEFS) and Prof. Ludovic Phalippou (Oxford) along with Prof. Mark Jansen (Utah) will be presented at the following world-leading conference:

• 34th Mitsui Finance Symposium: Venture Capital and Private Equity (June 8-10, 2023) in Michigan (U.S.A.)

In their study, the authors highlight the importance of Endowments, their Asset Allocation and their liquidity management on the functioning of Universities. They show that unfunded capital commitments are negatively correlated with cash holdings, and positively correlated with lines of credit. They argue that the degree to which unfunded commitments are hedged with cash and credit lines has real consequences. In fact, hedged endowments outperformed during the 2008 financial crisis, and underperform in normal times. Finally, universities with hedged endowments in 2008 spent more on faculty salaries and scholarships throughout the 2010s.