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Article: Risky bu$ine$$: hedge funds are lightly regulated and high risk, but they have grown over the years as a percentage of all endowment investments by colleges and universities.
- Article from:
- Diverse Issues in Higher Education
- Article date:
- June 15, 2006
- Author:
CopyrightCOPYRIGHT 2006 Cox, Matthews & Associates. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Hedge funds are the rock stars today's financial world. These lightly regulated private pools of equity, which are open only to rich players, are managed through secretive and sophisticated investment strategies. Although the risks are high, so are the potential benefits. Hedge funds can pay returns of up to 30 percent or more, considerably higher than other investments such as mutual funds or bonds. Despite the risks, many colleges and universities have chosen to invest heavily in hedge funds. One of those schools is DePauw University in Greencastle, Ind.
For a small institution--approximately 2,500 students--DePauw has a rather large endowment of approximately ...