Alternative investments have gained popularity with all types of investors in recent years, but universities, non-profits, and other entities that follow the ‘endowment’ style of investing now allocate more than half their portfolio to alternatives. Endowments like alternatives because it gives them a way to get uncorrelated alpha and strong risk-adjusted return, but a bullish equity market and strong correlations with many alternative strategies call that rationale into question. Endowments: Investment talent is key The ‘endowment model’ uses long-term asset pools, whether it be a literal endowment, a pension fund, or long-term reserves, to take advantage of illiquid parts of…