The long-term horizon of the endowment allows for a large allocation to equity-oriented strategies where the potential for long-term capital appreciation exists.

Other assets, including but not limited to hedging, derivative, or diversification strategies, will also be used to reduce risk and overall portfolio volatility. The following are major components of that strategy.


The Endowment is managed to maximize annualized returns net of all costs over rolling 10-year periods while adhering to the Endowment’s stated risk parameters.

The Endowment is diversified across asset classes and managers.

Risk Considerations

The Endowment is deployed in a manner that seeks to avoid 25% or greater peak-to-trough declines in inflation-adjusted unit value excluding spending.

The Endowment is structured to avoid annualized shortfalls exceeding 3%, relative to the mean return of endowments with greater than $1 billion in assets reporting to NACUBO, over rolling 10-year periods.


Under normal circumstances, not more than 70% of the Endowment’s net assets are held in vehicles utilizing lockups exceeding 12 months. As a general rule, not more than 40% of the Endowment’s net assets are held in vehicles utilizing lockups exceeding 60 months, recognizing that private partnership cash flows are unpredictable. Lockup is defined as an expected period until all or substantially all of the value from an investment vehicle can be received in cash by the Endowment.

Sustainable Investments

In April 2010, the College established the “Sustainable Investments Initiative” to which donors concerned about sustainability within the endowment could contribute. Funds contributed are invested in investment vehicles that meet the College’s criteria for being sustainable. Possible options are socially responsible mutual funds, low-carbon exchange traded funds, private equity funds focused on alternative energy, or separately managed investments with an asset manager that agrees to include sustainability criteria into their investment screening process. The value of this fund was $49.0 million as of June 30, 2016.

Finance Office
152 Maple Street
Marble Works, Suite 102
Middlebury, VT 05753