Seventy-Five Years of Investing for Future Generations

University endowments invest for future generations, so their strategy should reflect their long horizon. We researched whether they really do behave like long-term investors. We examined the behavior of US endowments since 1945 and drew comparisons with earlier periods. Using a long-run dataset on 12 major universities, we examined their preferences for risky assets and documented their big strategic moves into equities and, later, into alternatives. We then analysed how they invest at the time of crises and the extent to which they exploit their long-horizon advantage. We found that, on average, endowments invested countercyclically at crisis times, particularly by increasing their allocations to risky assets after a crisis.Disclosure: The authors report no conflicts of interest. Editor’s Note Submitted 19 June 2020Accepted 26 July 2020 by Stephen J. BrownThis article was originally published online with minor errors in Table 3 and Table 5, which have been corrected for both online and print versions. Please see Correction https://doi.org/10.1080/0015198X.2020.1836941