What a Tough Private Equity Environment Could Mean for University Endowments

College endowment investments in private equity funds could pose an increasing liquidity risk amid slow dealmaking in the financial sector, according to a new analysis of top-ranked universities from research firm Markov Processes International. MPI’s analysis, published Monday, put the average endowment allocation to private equity at Ivy League and other elite colleges in fiscal 2023 at 36.7% — a substantial chunk of their investment total. About 26% of those allocations came in unfunded investment commitments, meaning the institutions are obligated to put up capital in the future. Those could be subject to capital calls by fund managers, which would require endowments to come up with cash to meet their commitments.