Learning Orientation and Performance at University Endowments

Abstract

University endowments with broad portfolio diversification have been correlated with superior risk-adjusted performance, but committee characteristics affecting those diversification decisions have not been tested previously. The investment committee’s learning orientation (consisting of open-mindedness, learning commitment, information sharing, and shared vision) is found to affect portfolio diversification indirectly via Portfolio Theory considerations. Investment committees whose members have expertise in diverse asset classes have a direct effect on portfolio diversification.

Keywords: University Endowment, Portfolio Diversification, Learning Orientation, Portfolio Theory