PGIM, UNCF Study Finds Private HBCU Endowments Need Investment Support
29 Janeiro 2024 - 11:00AM
Business Wire
Joint study identifies private HBCUs’ main constraints in
growing their endowments and how asset managers can help optimize
their investment returns for the long term.
Historically Black colleges and universities (HBCUs) are a
critical learning path for Black students seeking quality higher
education in the United States. Yet, these institutions face
systemic challenges in accumulating substantial endowments, a
crucial factor for ensuring institutional stability and growth. A
new study launched by UNCF (United Negro College Fund) and PGIM,
the global asset management business of Prudential Financial, Inc.
(NYSE: PRU), explores these challenges and how the asset management
industry can work with HBCUs to achieve better outcomes.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240129943412/en/
“Investing in Change: A Call to Action for Strengthening Private
HBCU Endowments,” details the perspectives of endowment
professionals from nearly one-third of all private HBCUs gathered
through a comprehensive online survey. Additionally, HBCU endowment
professionals participated in a focus group, providing deeper
insights into their experiences and the ways in which they use
their resources to uplift students and their communities.
The study makes clear that private HBCUs have far fewer
resources than non-HBCUs when it comes to overseeing their
endowment portfolios — placing limitations on how they are able to
use their endowment, manage risk and make asset allocation
decisions.
“Our hope is that this research initiates critical conversations
about how to level the playing field for HBCU endowments and how
asset managers can engage with these vital institutions to help
them meet their long-term goals,” said Sancia Dalley, managing
director and head of PGIM’s DEI Portfolio and HBCU Investment
Strategy. “PGIM’s work with HBCUs and UNCF is one way we can help
fuel an ecosystem that is already producing a strong talent pool of
future professionals for our industry.”
“HBCUs have, for centuries, pursued their missions without the
endowment resources afforded to their counterparts. They have done
tremendous work with a hand tied behind their back,” said Ed
Smith-Lewis, vice president for strategic partnerships and
institutional programs at UNCF. “Using this study as a foundation,
UNCF is leading the charge to forge a new era in which HBCUs are
able to cultivate the endowments required to accelerate their work
and impact. We’re proud to partner with Prudential and its asset
management business PGIM on this study and look forward to our
continued strong partnership.”
Key Findings
The study indicates four main constraints for HBCU endowment
professionals tied to lack of funding and the comparably small size
of their endowments:
- Smaller HBCU endowments limit infrastructure and
capabilities. Eighty-six percent of the private HBCU
institutions in the survey use their endowment predominantly to
fund scholarships, with little budget left to support other
essential needs.
- HBCUs steward their endowment with significantly fewer
investment management resources. Private HBCUs on average have
only one internal investment management professional, often as part
of a broader role, compared to an average of six internal
investment staff at non-HBCUs.
- HBCUs are substantially more risk-averse than non-HBCUs.
Currently, a modest majority of HBCU respondents (63%) classify
their risk tolerance as moderate, with the remainder preferring a
more conservative approach. Only 13% of private HBCUs have specific
resources allocated to risk management activities, significantly
lower than the 54% of non-HBCUs that do.
- HBCUs have smaller alternatives allocations than
non-HBCUs. On average, private HBCUs are holding about 27% less
of their portfolio in alternative asset classes compared to
non-HBCUs (14% vs. 41%). These differences suggest HBCUs may
benefit from more sophisticated liquidity management tools and
processes, as well as a higher risk tolerance, to optimize their
long-term returns.
Opportunities for engagement with HBCUs
The asset management industry is well-positioned to help HBCUs
with these challenges:
- Offering investor education and access to innovative
investments and diversification solutions: Most private HBCU
endowments point to both of these areas as avenues that could
enhance their investment outcomes.
- Sharing risk management expertise: There is a
significant need for advanced risk management support among HBCUs,
especially to navigate macroeconomic challenges, including interest
rate and inflation risks.
- Providing portfolio management oversight: Collaborating
with experienced partners could guide HBCUs toward adopting
moderately higher risk tolerances and increasing allocations to
alternative asset classes.
- Supporting endowment pooling initiatives: The smaller
assets of HBCUs limit their access to investment opportunities
available to well-capitalized institutions. Many private HBCUs
(44%) are interested in pooling their endowments, which could
provide shared resources and improved investment insights.
The PGIM and UNCF study is part of Prudential’s broader HBCU
strategy to support HBCU leadership, faculty and students, aimed at
increasing access and exposure to the financial services and
investment management industries. Since 1978, Prudential has
provided more than $1.4 billion to help eliminate barriers to
financial and social mobility for underserved and underrepresented
populations.
“Brilliance exists in every area of our society, but access to
the tools and resources needed to thrive is often a barrier,” said
Kathy Sayko, PGIM’s chief diversity, equity and inclusion officer.
“This study and PGIM’s ongoing partnership with the HBCU community
are an extension of our responsibility to support the next
generation of investment leaders, so they can be competitive and
thrive in our industry.”
For the full study findings, read Investing in Change: A Call to
Action for Strengthening Private HBCU Endowments at
pgim.com/HBCU.
ABOUT UNCF
UNCF (United Negro College Fund) is the nation’s largest and
most effective minority education organization. To serve youth, the
community and the nation, UNCF supports students’ education and
development through scholarships and other programs, supports and
strengthens its 37 member colleges and universities, and advocates
for the importance of minority education and college readiness.
While totaling only 3% of all colleges and universities, UNCF
institutions and other historically Black colleges and universities
are highly effective, awarding 15% of bachelor’s degrees, 5% of
master’s degrees, 10% of doctoral degrees, and 19% of all STEM
degrees earned by Black students in higher education. UNCF
administers more than 400 programs, including scholarship,
internship and fellowship, mentoring, summer enrichment, and
curriculum and faculty development programs. Today, UNCF supports
more than 50,000 students at over 1,100 colleges and universities
across the country. Its logo features the UNCF torch of leadership
in education and its widely recognized trademark, “A mind is a
terrible thing to waste.” Learn more at UNCF.org or, for continuous
updates and news, follow UNCF on Twitter at @UNCF.
ABOUT PGIM
PGIM, the global asset management business of Prudential
Financial, Inc. (NYSE: PRU), is a global investment manager with
more than $1.2 trillion in assets under management as of Sept. 30,
2023. With offices in 18 countries, PGIM’s businesses offer a range
of investment solutions for retail and institutional investors
around the world across a broad range of asset classes, including
public fixed income, private fixed income, fundamental equity,
quantitative equity, real estate and alternatives. For more
information about PGIM, visit pgim.com.
Prudential Financial, Inc. (PFI) of the United States is not
affiliated in any manner with Prudential plc, incorporated in the
United Kingdom, or with Prudential Assurance Company, a subsidiary
of M&G plc, incorporated in the United Kingdom. For more
information please visit news.prudential.com.
CONNECT WITH US: Visit prudential.com Follow
on LinkedIn
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240129943412/en/
PGIM Alyssa McMahon +1 973-204-5808
alyssa.mcmahon@pgim.com
UNCF Roy Betts +1 240-703-3384 roy.betts@uncf.org
Prudential Financial (NYSE:PRU)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Prudential Financial (NYSE:PRU)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024