Universities Place a Higher Priority on Keeping Hedge Fund Managers Rich than Education

That is the implication of a NYT article reporting on the fact that the returns on university endowments trailed a simple index mix of either 60 percent stock and 40 percent bonds or 70 percent stock and 30 percent bonds. According to the article, university endowments had an average nominal return over the last decade of 4.6 percent. This compares to a return of 5.3 percent for a 60-40 stock/bond index mix and 5.4 percent for a 70-30 stock/bond index fund.

This means that universities were t...