The Vanderbilt Case

For this week's discussion, consider the following:
Investment strategies and products should be selected on the basis of objectives, risk tolerance, and one's ability to select and manage its choices.
Suitability refers to the "appropriateness" of an investment strategy or product to an investor with respect to its return objectives, tolerance for risk,
and sophistication. Discuss the objectives of a university endowment and the suitability of esoteric and often highly levered investment products, such
as hedge funds. Use the Vanderbilt Endowment as an example if you wish.
Investors often invest through managed vehicles, such as funds. It is common that the investment manager's compensation includes a management
fee and performance-based incentives. Discuss the rationale for including performance-based structures in a compensation plan and how such a
structure may alignment or misalign the interests of a manager and its client (or employer).