Full disclosure although I didn't go to Notre Dame I am a huge Notre Dame fan. I've been going there since age 7 and have season football tickets. The Chief Investment Officer, David Malpass of the Notre Dame endowment fund and Jay Jordan were both on CNBC this past week discussing how they were able to grow the fund through the great recession.
Notre Dame has been one of the top performers among the large endowments of the past 15 years with a return rate of 12.1%, it is the 14 largest educational endowment in the country. Here are some items to point our regarding their fund and strategy:
Take a long-term horizon
Asset Allocation - 30% hedge funds/30% private equity/25% Equities/15% Other
40% invested overseas
Attempt to avoid leverage
Corporate distress market (again long-term view)
A key take away as the managers point out is that most people can't invest in opportunities that an endowment invests in. You can somewhat mirror their asset allocation strategy and take a long-term focus but getting into a hedge fund or private equity position is very difficult without a significant amount of capital.
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