The University of Virginia is being criticized by local newspapers and financial bloggers for an endowment-investment strategy that relies heavily on private-equity funds and similar kinds of so-called alternative investments.

On paper, the university’s long-term investment pool dropped in value by nearly $1-billion, to $4.2-billion, from June 30 to October 31. And because it is committed to those kinds of investments, the university has said it may have to sell stocks at a loss to raise the cash it needs to fulfill its obligations to private-equity funds in which it has pledged to invest.

An article depicting the strategy as risky appears in this week’s issue of The Hook, an alternative newspaper in Charlottesville, Va., and includes commentary from Wall Street observers who criticize UVa and other institutions for having a “fetish” for the risky investments.

The article includes excerpts from an open letter from the university’s president, John T. Casteen III, issued last week to counter what he called “ill-informed stories in the press and in blogs” about the structure and status of the institution’s endowment. —Goldie Blumenstyk