How Endowments Evaluate Private Fund Managers

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This article draws on findings from Dakota's report Inside the Largest University Endowments, which covers portfolio construction, performance data, and CIO turnover across the more than 140 US university endowments managing over $1 billion in assets.

Over a 10-year horizon, the gap between top-quartile and bottom-quartile university endowments is 130 basis points. In FY2025 alone, the best-performing endowment returned 16.2% against a worst performer of 3.3%, roughly five times lower, even though the median across the universe came in at 11.1% (Dakota,). Compounded over a decade, that spread is the difference between hundreds of millions of dollars in real purchasing power for the institutions and their students.

Almost none of that dispersion comes from asset allocation. It comes from which managers got the check. That is why endowment investment offices treat manager evaluation as the central discipline of the job, and why understanding how they run it matters more to a fund manager than almost anything else about the endowment channel.

In this article, we're discussing how endowments actually evaluate fund managers, from allocation versus manager selection, to how access and relationships factor into the process, to what a CIO transition means for existing manager relationships.

Allocation Sets Exposure. Manager Selection Sets the Outcome.

Dakota's research team, which tracks portfolio construction and performance across the more than 140 US university endowments managing over $1 billion, found that private equity allocations across that universe range from near zero to 58.9%, with a median around 29%. Endowments with meaningfully higher private equity exposure have generally outperformed. But the dispersion within any given allocation level is wide enough that a 40% allocation to mediocre funds will lose to a 20% allocation to top-quartile funds (Dakota).

The 10-year top performers make the point directly. MIT and Brown run private equity and venture allocations of 35% and 44% respectively and land in the top decile on long-term returns. So does Notre Dame at 49.2%, a program built by former CIO Scott Malpass over 33 years. What ties these institutions together is not the allocation number, it is CIO tenure: the average tenure among Dakota's top 10 long-term performers is 14 years, with Michigan's Erik Lundberg in place since 1999 and MIT's Seth Alexander since 2006 (Dakota). Manager evaluation at these institutions is not a periodic exercise. It is a multi-decade discipline run by the same people.

Access Is Part of the Evaluation, Not Separate From It

Dakota's research also surfaces something fund managers underweight: at the top of the market, being evaluated well and being invited to raise are the same process. The best general partners have more demand than capacity, and they decide who sits at the table based on relationship quality, not check size alone. Endowments that provided patient capital when a manager was small, stayed committed through slow-distribution vintages, and contributed beyond the check, through advisory board seats and market intelligence, get the preferred call and the allocation size they ask for when the next fund is oversubscribed. A new investor without that history joins a waiting list (Dakota).

For a fund manager, this means the diligence an endowment runs on you is inseparable from the diligence you should be running on them. A 15-year relationship with a top-quartile endowment is worth more than a larger, newer commitment, because it compounds into first-call access for every future fund.

Before that relationship starts, the track record has to hold up. View any private fund manager in Joe, powered by Dakota, and see their performance across every fund they've raised, benchmarked against true vintage-year peers. Request access to look up a manager's history.

A Leadership Change Restarts the Entire Evaluation

Dakota has tracked an unusually high volume of CIO transitions from late 2025 into early 2026, spanning retirements, departures, and promotions, with the affected institutions managing roughly $80 billion in combined assets. Every one of those transitions triggers a full manager roster review, typically over 12 to 18 months, run through the new CIO's own lens. Some existing relationships survive. Others do not, replaced by managers that reflect the incoming CIO's network and convictions (Dakota, April 2026).

The practical implication is that a relationship built with one individual does not transfer automatically to their successor. Firms that had invested across the broader investment team, not just the CIO, tend to survive these transitions with their allocation intact.

Below $1 Billion, the Evaluator Is Often Not the Endowment

Dakota Marketplace tracks 602 US endowment and hospital endowment accounts in total. Just 66 hold more than $5 billion, and 228 hold more than $1 billion, meaning a majority of the universe sits below the threshold where a full internal investment office is the norm.

Dakota's research on the $1 billion-plus segment found that OCIO delegation is uncommon at the very largest endowments but concentrated in the $1 billion to $2 billion range, and becomes far more common below $1 billion entirely. Cambridge Associates is the most active OCIO provider in the space and functions as a gatekeeper: a manager not on Cambridge's approved list is effectively absent from the endowments it advises, regardless of track record. University of Richmond, at $3.5 billion, is the largest OCIO-managed endowment, advised by its own Spider Management; University of Alabama, at $1.5 billion, is advised by Fund Evaluation Group (Dakota, April 2026).

For fund managers, this changes where the evaluation actually happens. Below roughly $1 billion in endowment assets, the manager review is frequently run by an OCIO or general consultant, not by the institution's own staff, and the OCIO relationship has to be built first.

How to Approach This Market

Segment endowment targets by governance model before AUM alone. Above $1 billion, expect a tenured internal investment team running its own multi-year evaluation. In the OCIO-heavy $1 billion to $2 billion band and below, identify the OCIO or consultant of record and build that relationship directly. Invest in the whole investment office, not just the CIO, since leadership turnover is elevated and relationships tied to one person do not survive a transition. And treat every fund raise as an opportunity to deepen a long-term relationship rather than close a single commitment, since the endowments compounding the strongest long-term returns are the ones rewarding exactly that kind of patience.

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