Determine the asset allocation approach that is most suitable for the Endowment. Justify your response.

Calixto reviews the endowment’s future liquidity requirements and analyzes one of its holdings in a private distressed debt fund. He notes the following about the fund:

Mbalenhle Calixto is a global institutional portfolio manager who prepares for an annual meeting with the investment committee (IC) of the Estevão University Endowment. The endowment has €450 million in assets, and the current asset allocation is 42% equities, 22% fixed income, 19% private equity, and 17% hedge funds.
The IC’s primary investment objective is to maximize returns subject to a given level of volatility. A secondary objective is to avoid a permanent loss of capital, and the IC has indicated to Calixto its concern about left-tail risk. Calixto considers two asset allocation approaches for the endowment:
mean–variance optimization (MVO) and mean–CVaR (conditional value at risk) optimization.

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Determine the asset allocation approach that is most suitable for the Endowment. (Circle one.) MVO Mean-CVaR optimization Justify your response.