According to a press release, the study found that foundations’ average three-year returns declined to -3.1% from 10.8% a year ago, with average five-year returns remaining slightly positive at 2.2%, down from 13% a year ago.
The only asset class reporting positive returns for FY2008 was fixed income, with an average return of 0.6%, the press release said. All other investment categories had negative returns, led by international equities at -41% and domestic equities at -36.3%.
Alternative strategies as a whole had returns of -16.4%; marketable alternative strategies returned -19.4%; while venture capital and private equity returned -6.2% and -7.8%, respectively. Private equity real estate returns were -8.8%; energy and natural resources returns were -23.3% (commodities and managed futures within this category returned -28.2%); and distressed debt returns were -13.7%. Short-term securities returned -1.8%.
Participating foundations reported average asset allocations of 27% to domestic equities (versus 32% in 2007); 16% to fixed income (15% in 2007); 15% to international equities (20%); 36% to alternative strategies (28%); and 6% to short-term securities and cash (5%).
Participating in this year’s study were 290 independent/private and community foundations, comprising 221 independent/private foundations and 69 community foundations, representing combined assets of over $131 billion.
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