Research

Published Papers

Investing With Purpose: Evidence From Private Foundations

The Journal of Finance, 2026, 81(4)

Abstract: We study the asset allocation and investment performance of U.S. private foundations that support the charitable sector. Large foundations generated positive risk-adjusted returns before 2008, driven by early access to private equity and venture capital funds, but have underperformed since. The median foundation underperforms by more than 100 basis points. Foundations with concentrated stock holdings achieve higher returns but assume more risk. Due to the constraints imposed by the 5% minimum spending rule and accommodating monetary policy, foundations increase risk-taking and reach for yield. Over time, a conservative asset allocation decreases real wealth, reducing charitable giving.

A New Lease on Firm Behavior

with Robert Connolly, Fotis Grigoris, and Crocker Liu

Journal of Corporate Finance, 2025, 94(1)

See the ASC842 Leasing Data here
Runner Up Award, 2021 Financial Markets and Corporate Governance Conference

Abstract: When firms have discretion in valuing their balance sheet debt, how do they make this valuation decision given its impact on firm value? Firms make extensive use of operating leases, but unlike other types of debt, their balance sheet value is set by the firm. Using novel information on operating leases, we examine firm behavior in valuing these leases. We find that 20% of firms report higher-than-expected rates, reflecting their cost of unsecured rather than collateralized borrowing. These firms have poor information quality, operate in competitive markets, and understate lease and debt ratios by 15%.

Paying Managers of Complex Portfolios: Evidence on Compensation and Performance from Endowments

with Robert S. Harris

Journal of Financial and Quantitative Analysis, 2024, 1-35.

Abstract: We examine compensation for endowment Chief Investment Officers (CIOs) overseeing portfolios with significant allocations to alternatives. We find widespread use of bonuses and that large endowments with high alternative allocations hire CIOs with stronger backgrounds, pay them more, and have higher pay-for-performance sensitivity. We find weak evidence of a relationship between compensation and future performance. Our results align with contract theory predictions but differ from empirical findings on pension funds. Endowments pay CIOs more, rely more on bonuses, attract more experienced professionals, and have lower turnover than pensions. This suggests more effective talent management compared to politically influenced public pensions.

How Does Human Capital Affect Investing? Evidence from University Endowments

with Gregory W. Brown, Robert S. Harris, and Christian T. Lundblad

Review of Finance, 2023, 27(1), 143-188.

2023 IQAM Prize in Financial Economics, Review of Finance
2019 WFA Two Sigma Award for Best Paper on Investment Management

Abstract: We examine the links between human capital and endowment investing. Harnessing detailed information on university endowments, we find that higher asset allocations to alternative assets accompany higher levels of human capital in the endowment’s investment process. Moreover, high levels of human capital are linked to larger returns, even on a risk-adjusted basis. The improved investment outcomes arise because endowments (i) capture higher returns that can accompany alternative assets, (ii) select or have access to high performing managers, and (iii) minimize fees by accessing funds directly rather than through funds of funds. Our measures of human capital include expertise in alternatives on governing bodies, the presence of a chief investment officer, and the size of the investment staff. Finally, we conduct a novel survey of endowments and confirm that human capital is central in facilitating alternative investments.

The Role of Debt in Financing Higher Education

with Kyle E. Zimmerschied

Financing Institutions of Higher Education, National Bureau of Economic Research. In: John Y. Campbell and Kaye Husbands Fealing. University of Chicago Press.

Abstract: This paper examines the use of debt, leverage levels, and cost of debt for U.S. four-year public and private non-profit universities. Universities have become increasingly reliant on debt with issuance amounts increasing from $3 billion in 1985 to more than $50 billion in 2019. We find that public universities have a lower cost of debt than private universities by about 25 basis points. Consistent with this reduced cost of debt, we document a 50 percent increase in leverage for public universities while private universities have experienced a 25 percent decrease in leverage over the last 20 years. We find a one percent increase in the excess issuance cost over the risk-free rate following the decline of the municipal insurance market. We document large increases in the use of taxable debt over time due to the more flexible nature of its use. Lastly, we document the increasing use of debt by U.S. universities has contributed to the increasing cost of higher education. Debt issuances result in no detectable increases in educational quality but are instead directed towards increasing the quality of university amenities. In summary, our results provide context for the increasing use of debt by higher education and its implications for students and other stakeholders.

Working Papers

Benchmarking Private Equity Portfolios: Evidence from Pension Funds

with Nik Augustin and Elyas Fermand

R&R at Management Science

Presentations: 15th Annual Private Equity Research Symposium (PERC); UNC Inaugural Alumni Conference; 2024 VSB Mid-Atlantic Research Conference in Finance (MARC); 2024 Eastern Finance Association (EFA); 2024 Silicon Prairie Finance Conference; 2024 Midwest Finance Association (MFA)

Media Mentions: Institutional Investors, CFA Institute

Abstract: We document significant heterogeneity in benchmarks used for US public pension fund private equity (PE) portfolios. Benchmark type (e.g., public vs. private, domestic vs. global), spread, and complexity vary predictably with PE allocations and specialty consultant use. General consultant turnover predicts PE benchmark changes, and leads to broader operational shifts; after a general consultant change, there is a 7% higher probability of PE consultant turnover. Public pension funds beat their PE benchmarks about half the time, but over the last 20 years, benchmarks consistently became easier to beat. We attribute benchmark changes to consultants' labor market incentives to expand their client portfolio, rather than changing private equity return expectations.

Institutional Investors in Private Markets: Limited Partner Performance Beyond Private Equity

with Omer S. Prakash

Abstract: Institutional investors allocate trillions of dollars to private markets beyond buyout and venture capital, yet little is known about whether heterogeneity in limited partner (LP) performance extends to real estate, real assets, and private debt. Using a comprehensive sample of LP-fund commitments from 1991-2018, we show that endowments and foundations earn 2-3 percentage points higher net IRRs than public pension funds in value-add and opportunistic real estate and in energy-focused real assets, while financial institutions outperform by 1.2-1.8 percentage points in mezzanine and direct lending. These differences narrow after 2007. The results are not explained by home bias or impact investing and are driven primarily by avoiding bottom-quartile funds rather than reinvestment decisions or first-time fund selection, consistent with access advantages over skill. Overall, LP expertise is strategy-specific, with implications for institutional portfolio allocation across private market strategies.

The Real Effects of Operational Risk: Evidence from Data Breaches

Presentations: EFA (2020, cancelled); SWFA (2020, cancelled); NFA (2019)

Abstract: Operational risk poses unique challenges to corporations around the world. However, little is known about the consequences of risk management vulnerabilities on financing costs and firm outcomes. In this paper, I document substantial and persistent effects on financing costs and debt contracting caused by operational risk management vulnerabilities following data breaches of public firms. Exploiting data breach events between 2005 and 2015, I find that lenders charge breached firms 15 to 20 percent larger spreads, and tighten covenant intensity, consistent with a shift in control rights over cash flows. The effect is larger for breaches of financial information or malicious cyber-attacks, and for firms with lower attention to risk management. Moreover, financial and operating leverage increases, profitability drops, and firms face a higher probability of default. Lastly, ex-ante mispricing by banks does not explain these findings.

Work in Progress

Running Digital Asset Funds
Debt Financing in Higher Education

Book Chapters

University Endowments

The Palgrave Encyclopedia of Private Equity. In: Cumming, D., Hammer, B. (eds) Palgrave Macmillan

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