A new study by healthcare-focused private equity firm Health Management Academy concludes that as of late, hospital systems have made changes to their investment strategy. The study that looked at 40 hospital systems with aggregate long-term invested assets of $51 billion found that a surprising number of systems were moving assets away from bonds and toward new vehicles between 2005 and 2007. Bond allocations decreased 20 percent, from 33.7 percent to 26.9 percent, while alternative investments grew 47 percent (from 12.5 percent to 18.4 percent).
And how did these investments perform? By 2007, the top 10 percent of performers had 34.9 percent of assets in alternative investments and 14.8 percent in fixed income, where the bottom decile had 34.1 percent in fixed income and 12.4 percent in alternatives. Also, the top decile had 5.5 percent of total invested assets in private equity, compared with only 1 percent in the bottom decile.
To learn more about this research:
- read this research report (.pdf)
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