In the past year, the values of many university endowments have declined by record amounts.  The negative returns have forced some schools to freeze faculty salaries and slow campus expansion and other improvement plans.  Now, in the wake of the economic downturn, university endowments are picking up the pieces and reexamining their investment strategies.  Harvard Management Co. (HMC), the company that manages Harvard University’s endowment, has announced that it may increase the amount of assets it manages internally and that such a move may involve selling off some holdings in hedge funds.  However, other university endowments are not necessarily following in HMC’s footsteps and are expected to continue outsourcing their investment management processes.  This article examines trends in endowment investment management, and in particular discusses what university endowments are; the history of investments by university endowments in hedge funds (including the story of David Swensen’s successful foray into alternatives); the rationale for insourcing by university endowments of investment management; the pros and cons of insourcing versus outsourcing; and various alternative methods for university endowments to access hedge fund strategies and talent in a manner consistent with the various concerns that, at least in HMC’s case, have led to insourcing.