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Spot What Endowments Will Inevitably Need
Adapted for fund managers pitching endowments from Chapter 1 of Capital Raising by Richard C. Wilson.
One company I admire has a value I come back to often. Expedite the inevitable. See which trends are coming and beat your competitors to them, even before the trend has fully played out.
We have done this in our own business. Starting the Family Office Club, launching a podcast, buying FamilyOffices.com and starting events for family offices and big capital raisers all came from seeing a growing need early. If we hadn't filled it, someone else would have.
Questions to find the next endowment need
While you analyze investors and competitors, ask:
- Are endowments routinely asking for something only a few managers offer?
- Are they asking for something nobody offers yet?
- Is there a trend among the largest allocators that smaller ones will follow?
Where to look
Annual reports. Endowment reports and audited statements show what institutions own and how that is shifting. NACUBO's FY2025 public tables show alternative strategies at 62.2% of dollars for endowments over $5 billion and 11.9% for those under $50 million. If smaller institutions move even part of the way toward the larger ones, they will need help getting there.
Spending pressure. Many endowments carry spending rates near 5%. NACUBO's FY2025 average effective spending rate was 4.9%. Strategies that support steady payouts stay in demand.
Staffing. Small endowments can't hire big teams. Products that bring institutional access in a simpler package fit that gap.
Committee questions. Listen to what trustees ask staff. Their worries become next year's mandates.
Move before it is obvious
When a trend is in every conference keynote, it is already crowded. The time to build is when you see three or four allocators asking for the same thing and nobody is answering well.
Pick a few rising tides
Write down three trends you believe will grow for endowments over the next five years. Which one fits your DNA and your team? Start there.
Frequently asked questions
Isn't trend chasing risky?
Chasing a fad is. Building for a durable need you can see in the data is different.
How do I test a trend?
Ask ten allocators if they would want it. If several say yes and can explain why, it is real.
Should I change strategy to fit a trend?
Only if it fits your skills. A trend outside your edge is someone else's opportunity.
Sources
- Capital Raising, Chapter 1, Richard C. Wilson .
- NACUBO-Commonfund Study of Endowments, FY2025 public tables (asset allocation and spending): https://edge.sitecorecloud.io/nacubo1-nacubo-prd-dc8b/media/Nacubo/Documents/EndowmentFiles/2025-NCSE-Public-Tables--Summary-Asset-Allocations-FINAL.pdf and https://edge.sitecorecloud.io/nacubo1-nacubo-prd-dc8b/media/Nacubo/Documents/EndowmentFiles/2025-NCSE-Public-Tables--Spending-Rates-FINAL.pdf
