Investment considerations for endowments and foundations 2026 

Over the past 25 years, the endowment model has undergone a structural evolution, shaped as much by the contraction of public markets as by the expansion of private ones. In the late 1990s, diversification meant allocating away from a listed equity universe that offered breadth and depth, with alternative investments framed as a satellite allocation designed to smooth volatility and capture illiquidity premia. That framing no longer holds. The market and asset classes have evolved since that time.

The past year in particular has tested the resilience of many endowments and foundations. Governments have reduced their direct and indirect support to many non-profits. Public capital markets have weathered substantial uncertainty, and private market distributions have remained subdued, creating pressure on cash flows. 

Against this backdrop, investment committees are reassessing asset allocation with fresh urgency, seeking portfolios that draw on diverse sources of return while maintaining sufficient liquidity to sustain their missions in an environment defined by uncertainty.

We urge long-term endowment and foundation investors to consider four active decisions in 2026 to set up organizations for success towards long-term sustainability. 

1. Review and manage new catalysts within equity markets 
2. Have an awareness of varying private market vehicles in the market
3. Apply precision in structuring hedge fund portfolios
4. Understand your needs, and assess fixed income allocations accordingly