J.P. Morgan Outlines Trends Driving Investment Decisions for Endowments and Foundations

Aug 26, 2015, 10:11 ET from J.P. Morgan Asset Management

NEW YORK, Aug. 26, 2015 /PRNewswire/ -- J.P. Morgan Asset Management released its latest Investment Insights paper identifying current themes driving investment decisions for endowments and foundations in today's volatile economic environment. Authored by Monica Issar, Global Head, J.P. Morgan Asset Management Endowments & Foundations Group, and Anthony Werley, Chief Strategist, J.P. Morgan Asset Management Endowments & Foundations Group, the paper – "Seeking direction in a volatile market" – highlights prevalent trends in nonprofit investment management, as well as areas of opportunity for investors. Key findings include:

  • In a lower-return public equity environment, investors will need to shift from beta-oriented strategies to more intelligently sourced alpha in the public and private markets.
  • Nonprofit organizations are managing multiple objectives in the face of industry pressures. Many nonprofits are increasingly focused on risk – including pension liabilities, meeting target returns and managing short-term liquidity – with limited resources and are turning to strategic partners to help them navigate these challenges.
  • Institutions are actively restructuring their risk management, specifically in fixed income, toward more return-oriented strategies.

"Although most endowments and foundations benefited from double-digit equity returns in 2014, the outlook for future returns is more muted due to a paucity of readily evident market opportunities," Issar said. "However, as volatility and interest rates increase and global macroeconomic and financial cycles start to normalize, institutional investors will need to adapt to the changing market environment and look to generate opportunities in private equity, real estate, absolute-return fixed income and private credit."

"In a market environment that is likely to be characterized by lower absolute beta returns, endowments and foundations are reassessing their asset allocation," Werley added. "Investment opportunities that can provide diversification, flexibility and premiums above publicly traded options are likely to represent attractive options for not-for-profit organizations that can invest in less liquid, long-term investments."

Please view the full J.P. Morgan Investment Insights "Seeking direction in a volatile market" paper here or visit www.jpmorgan.com/institutional/ef.

About J.P. Morgan Asset Management

J.P. Morgan Asset Management, with assets under management of $1.6 trillion, is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors and high net worth individuals in every major market throughout the world. J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity. JPMorgan Chase & Co. (NYSE: JPM), the parent company of J.P. Morgan Asset Management, is a leading global asset management firm with assets of approximately $2.4 trillion and operations in more than 60 countries. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.  

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SOURCE J.P. Morgan Asset Management