In March of 2009, a fund manager contacted Abbot Downing, saying that one of its clients, an Ivy League university, was overcommitted to illiquid investments and hoped to sell some assets. Abbot Downing clients would have the right to first refusal. Four different assets were for sale, all priced at 40 cents on the dollar. “We got a sense of where we thought the value was and took shares of three of the four assets that we felt were very undervalued,” said John Lorentz, the foundation’s Abbot Downing investment manager.
The team had just ten business days to make a decision and finalize the purchase. "We wouldn't have been able to do this as a consultant. However, as the foundation's outsourced chief investment officer, we were able to move quickly and take advantage of this limited opportunity," Lorentz said.
The foundation recouped 90% of its investments within four months, and still had an asset that was worth much more than we paid.
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