Investment Principles

Long-term: The endowment is the permanent capital of Georgetown University, providing funding to support the academic mission of the institution for current and future students. The University’s time horizon with respect to endowment assets is, therefore, of infinite duration, allowing the Investment Office to capitalize on inefficiencies arising from the market’s shorter-term focus. Capital duration also enables staff to make illiquid investments in alternative asset classes, including private equity, private credit, real estate, and infrastructure.

Active Management: While difficult to find, managers with domain expertise in inefficient markets provide opportunities for outperformance.

Diversification: Georgetown employs an asset allocation policy intended to provide a strategic mix of growth, yield, and hedges against both inflation and deflation. The policy includes targets and ranges for asset classes and liquidity, allowing for tactical rebalancing based on market valuations and opportunities.

Discipline: The endowment’s governance process and investment framework, supported by rigorous research, fosters independent and contrarian thinking. Through monitoring and adhering to liquidity constraints, staff has the flexibility to pursue unconventional investments in moments of volatility, while also responding to the needs of the university. Disciplined rebalancing also adds value over the long-term.

Risk Management: Understanding the risk profile of the aggregate portfolio is crucial to managing the endowment effectively. Staff continuously monitor various measures of risk at both the macro (endowment) and micro (manager) levels. Volatility, tracking error, active share, factor exposures, VAR, CVAR and stress tests are among the many tools we use to measure risk.