Starting July 1, New York’s $5.4 trillion BlackRock will be tasked with managing Arizona State University’s (ASU) $600 million endowment.
The world’s largest money manager will succeed Perella Weinberg Partners’ Agility unit, which ran the endowment for the past three years.
Although BlackRock’s $110 billion globally outsourced investment management assets feature pensions, insurance companies, and other institutions, endowments and foundations aren’t typically an area they’re known for heading.
According to Bloomberg, BlackRock has provided risk advisory services to the university’s foundation since 2014.
The reason for the switch, according to Bloomberg, is because Arizona State is looking to explore “a wider array of strategies,” some of which includes moving more of its portfolio into passive investments.
According to an annual financial report, Arizona State’s foundation lost 4.4% from June 2015 to June 2016, and trailed a benchmark the past three years with an annual average return of 3.7% (the average endowment targets an 8% annual gain, which covers spending and inflation).
The $8.4 billion Agility was tasked with selecting asset managers to invest on behalf of ASU. The firm chose not to retain Arizona State, amicably splitting with the foundation late last year.