Market Commentary | Insights Blog

Chart of the Month | Recession Impacts on Employment and Wages

It may come as a surprise to many that average disposable personal incomes have increased by 6.6 percent from February prior to the pandemic through August. This is down from a high of 9.8 percent in...
Perspectives | Insights Blog

Study of Foundations Key Highlights 2019 [Infographic]

For the year ended December 31, 2019, participating private foundations reported an average return of 17.4 percent while participating community foundations reported an average return of 18.2 percent...
Governance And Policy | Insights Blog

The Key Endowment Questions for Challenging Times

During this time of unprecedented challenges, the financial health of colleges and universities is a critical concern. Boards, investment committees, institutional leaders, and their advisors must...
Investment Strategy | Insights Blog

How do you Measure Private Equity Investments?

Private capital investors use a particular set of quantitative and qualitative measures to assess performance. While the standard benchmarks used for marketable securities are sometimes applied to...
Outsourced CIO | Insights Blog

Top Ten Tips for Better RFPs

A tightly run RFP process can help ensure your organization will find an ideal investment partner to help you fulfill your organization’s mission. As the second installment of our blog series on the...
Market Commentary | Insights Blog

Chart of the Month | Low Rates Make Record Government Debt Manageable – For Now

Few people would have predicted that U.S. equity markets would be higher today than at the start of 2020 if told that a virus would infect over 7.0 million people in the U.S., cause over 200,000...
Governance And Policy | Insights Blog

Should We Issue an Investment Manager RFP? 7 Key Considerations

Best practice for nonprofits is to issue a Request for Proposal (“RFP”) for an investment management partner every market cycle. Typically, that is at least every 7 to 10 years, or as it is...
Investment Strategy | Insights Blog

Balancing Purpose, Payout, and Permanence: A Strategy Guide for Foundations

In partnership with the Council on Foundations, the National Center for Family Philanthropy has released Balancing Purpose, Payout, and Permanence: A Strategy Guide. Commonfund Institute is very...
Investment Strategy | Insights Blog

Chart of the Month | Inflation Expectations Surge, Driving Real Interest Rates Down

Chairman Powell’s speech at Jackson Hole during the last week of August confirmed the Fed’s dovish policy stance, giving investors ample support in terms of low rates and a flexible inflation...
Diversity | Insights Blog

Investing in Racial Equity: A Primer for University & College Endowments

Commonfund and Commonfund Institute are very happy to contribute to the new report from Intentional Endowments Network (IEN), “Investing in Racial Equity: A Primer for University & College...
Governance And Policy | Insights Blog

Observations on Diverse Manager Selection Across Asset Classes

At Commonfund, we believe diverse managers offer clients access to investment talent and valuable investment opportunities and therefore should be explored and invested in. Overlooking the merits of...
Investment Strategy | Insights Blog

Capturing Credit Opportunities in Times of Crisis

Key takeaways During periods of dislocation in high-quality credit, investors should  stay the course within fixed income portfolios and maintain active risk to benefit from the inevitable rebound...
Market Commentary | Insights Blog

Chart of the Month | Markets are Running Ahead of Economic Reality

When investors open their second quarter investment reports, many will be shocked by the magnitude of stock market gains in the second quarter. Their surprise could be voiced by a rhetorical question...
Investment Strategy | Insights Blog

Real Estate – Can’t Touch This!

Few markets have been as heavily impacted by the onset of the global pandemic as real estate.  Real estate is considered a hard asset that “you can touch and feel”, but during a pandemic no one wants...
Diversity | Insights Blog

Diversity and Inclusion: Ways to Make a Change

Across the United States, citizens are gathering to protest the unjust deaths of George Floyd, Breonna Taylor and Ahmaud Arbery; each of these individuals fell victim to police brutality and racial...
Investment Strategy | Insights Blog

Balancing Risk and Return

Risk surrounds us, and for investment fiduciaries it is inescapable if meaningful real returns are to be sought. While risk and return constitute the axes upon which investment portfolios are built,...
Market Commentary | Insights Blog

Chart of the Month | Measuring Social Distancing with Mobility Trends

We continue to monitor the level of social distancing as an indicator for business activity and improvement in consumer sentiment. Personal spending experienced the largest month-over-month drop on...
Diversity | Insights Blog

In Remembrance

The senseless killings of Ahmaud Arbery, Breonna Taylor and most recently, George Floyd have once again brought the scourge of racism to the forefront of our nation’s conscience. For many Americans,...
Market Commentary | Insights Blog

When Will this Crisis End? 3 Keys to Recovery

When will this crisis end?  Following are three key issues fiduciaries should keep in mind concerning COVID-19 and this pandemic recession and recovery. The path and trajectory of COVID-19 This is...
Investment Strategy | Insights Blog

Seven Ways to Diversify Your Private Capital Portfolio

A strong private capital program requires consistent, diversified investing over time. It is also necessary to have— or obtain externally— resources for research and due diligence before you invest;...
Governance And Policy | Insights Blog

Stewardship During This Crisis: Five Things for Boards to Consider

As the world continues to grapple with the social, economic, and public health implications of the current COVID-19 crisis, nonprofit organizations and their boards are working tirelessly to...
Market Commentary | Insights Blog

Chart of the Month | The Fed Rides to the Rescue

The Federal Reserve is determined to support the economy and the normal functioning of capital markets during the COVID-19 pandemic. As of April 29th, the total asset size of the Fed’s balance sheet...
Investment Strategy | Insights Blog

Crisis Response: A Framework for Strategic Decisions

With the equity markets retracing some of the losses that occurred in the first calendar quarter of 2020, endowment market values are likely recovering more quickly than we may have feared during the...
Governance And Policy | Insights Blog

Five Key Points of the Investment Policy Statement

The central document guiding the management of a nonprofit institution’s endowment—essentially, the strategic plan of the investment committee—is the investment policy statement (IPS). The IPS should...
Perspectives | Insights Blog

COVID-19 and Nonprofits | Five Observations from China

Although the full effects of the COVID-19 pandemic on U.S. nonprofits will not be known for some time there may be something to learn from what we’re seeing in China. China was the first country to...
Investment Strategy | Insights Blog

Do Bear Markets Favor Active or Passive Investing? It Depends.

In the ongoing debate about active versus passive investing, conventional wisdom posits that active investing outperforms passive in recessionary or bear market environments. The question is: Will...
Market Commentary | Insights Blog

Chart of the Month | The Dangers of Timing a Bear Market

It has been well documented that trying to avoid market downturns by selling out of stocks and moving to cash can be damaging to long-term portfolio values. And while there are strong behavioral...
Responsible Investing | Insights Blog

Diversity, Equity, and Inclusion: Staying the Course in Uncertain Times

The times we are living in are unprecedented. On March 11th, the World Health Organization (WHO) declared that the spread of COVID-19 constituted a global pandemic. Currently, in the U.S., the virus...
Governance And Policy | Insights Blog

10 Tips for Stewarding People Remotely

Six key words – Purpose, Policy, Process, Portfolio, People, and Perspective – form a framework for effective endowment stewardship. As trustees, investment committee members, and senior management...
Investment Strategy | Insights Blog

Coronavirus: Five Key Questions for Nonprofit Institutions

There is no question that we are in unprecedented times and will likely remain so for longer than we anticipated even a few weeks ago. The speed at which a new reality has been imposed on all of us...
Market Commentary | Insights Blog

Chart of the Month | A Price War Erupts in the Oil Market

Oil prices declined over 21 percent on March 9, 2020, the largest single-day decline since January 1991 during the Gulf War[1]. There was optimism prior to the OPEC (Organization of Petroleum...
Market Commentary | Insights Blog

Market Commentary: Impact of the Coronavirus on Markets and Portfolios

After a strong calendar year 2019, the S&P 500 reached its most recent all-time high on February 19, up nearly 5 percent since the year began. Now, a week later, the global equity markets have fallen...
Private Capital | Insights Blog

How to Select a Private Equity Manager

Are you are considering investing directly with a private equity manager? If you opt to go direct, you will be tasked with selecting, managing and disposing the assets entirely on your own. It may be...
Perspectives | Insights Blog

Study of Independent Schools Key Highlights [Infographic]

For the fiscal year ended June 30, 2019, independent schools reported a 5.7 percent return in endowment assets. In this infographic, we report the key highlights from the 2019 Commonfund Benchmarks...
Market Commentary | Insights Blog

Chart of the Month | Central Banks Increasingly Accommodative

World markets appeared to be returning to their upward trend in the beginning of February after a volatile start of the year. While concerns about global growth caused by the coronavirus outbreak are...
Investment Strategy | Insights Blog

Long-Term Equity Investors: A Global Perspective

Over the past decade U.S. equities have consistently outperformed international markets, leading many investors to question the role of non-U.S. equities in their portfolio. While the current cycle...
Investment Strategy | Insights Blog

Commonfund’s First Invitational Diverse Manager Day

On January 16th Commonfund held its first invitational Diverse Manager Day. The day was made possible as a result of the success we had from submissions to the Diverse Manager Portal launched last...
Investment Strategy | Insights Blog

2020 Investor Survey: Private Markets Sentiment

For the third year in a row, Commonfund Capital conducted a year-end annual survey of institutional investors to gauge their sentiment about private market investments. Survey responses totaled 267...
Market Commentary | Insights Blog

Chart of the Month | Election Year Market Trends

As we enter the 12th year of economic expansion since the Great Financial Crisis, investors continue to wonder whether 2020 will be the year when equity markets finally experience a correction....
Investment Strategy | Insights Blog

Impact Investing - A Market Matures

Investment strategy influenced by altruistic intentions – broadly, impact investing – has long held sway in a small number of portfolios. Historically, impact investing has failed to gain significant...
Private Capital | Insights Blog

Integrating ESG into Your Private Equity Portfolio

Many investors today, particularly nonprofits, are seeking to align their investment portfolio with the mission of their organization. Commonfund is a signatory to the PRI and as part of our...
Market Commentary | Insights Blog

Chart of the Month | Jobs Across the Country

The November non-farm payrolls report far exceeded investor expectation and bolstered the perception that the domestic economy continues to grow more than a decade into this recovery. Payrolls were...
Governance And Policy | Insights Blog

Purpose: What is an Endowment?

A critically important asset for many nonprofit organizations is their endowment, sometimes referred to by a different name such as long-term investment fund. So important is this pool of financial...
Market Commentary | Insights Blog

Chart of the Month | Fed Funds Rate Reduction Drives Markets to New Highs

U.S. equities reached an all-time high at the end of October as downside fears abated and risk-on sentiment improved. Among the positives, successful completion of “phase one” of the U.S. – China...
Market Commentary | Insights Blog

The Economy and Markets March On

Summary Positive signs on trade drove recent new highs in the U.S. equity markets The Fed continues to be accommodative and employment is strong Growth is slowing but is supported by the consumer,...
Private Capital | Insights Blog

Commonfund Forum Goes Global

During the week of October 14th, 2019 Commonfund Institute hosted our first Forum outside of the United States in Tokyo, Japan. We were honored to be joined by many leading Japanese institutional...
Investment Strategy | Insights Blog

Tactical Allocation: Winning Strategy or a Fool’s Game?

Institutional investors overseeing long-term pools of capital typically define their strategic asset allocation with specific targets and bands or ranges around those targets, which allow for...
Market Commentary | Insights Blog

Chart of the Month | Strange Happenings in the Repo Market

An obscure but very large part of the financial markets caused a stir in late September. Lending rates spiked in the repurchase (repo) markets as institutions sought short-term liquidity. The rate...
Private Capital | Insights Blog

Three Considerations for Your Private Equity Structure

This is the third blog in a private capital series based on our guide, “Succeed in Private Capital Investing”.  You can see the previous blog here. Having determined the size of your private capital...
Investment Strategy | Insights Blog

Announcing the Commonfund Diverse Manager Portal

In the fall of 2018, Commonfund announced the creation of its Diversity and Inclusion Office with the mission to “intentionally promote and foster inclusion and equity across Commonfund and our...
Market Commentary | Insights Blog

Chart of the Month | Yield Curve Inversion - Signal or False Positive?

Lately, there has been quite a bit of hand-wringing by the financial media about the yield curve inversion. It seems that many prognosticators believe that an inversion is a clear market signal that...
Investment Strategy | Insights Blog

Looking at Gender Lens Investing

What is Gender Lens Investing? Gender lens investing has garnered significant traction in the last decade. Broadly speaking, gender lens investing aims to achieve financial returns and benefit...
Perspectives | Insights Blog

Study of Foundations Key Highlights [Infographic]

For the year ended December 31, 2018, participating private foundations reported an average return of -5.3 percent while participating community foundations reported an average return of -3.5 percent...
Governance And Policy | Insights Blog

Traits of High-performing Boards … and Steps Toward Becoming One

Tom Hyatt is a partner in the Washington. D.C. law firm of Dentons US LLP and an authority on nonprofit governance. This blog is excerpted from a presentation he made recently at the Commonfund...
Governance And Policy | Insights Blog

Back to Basics: The ABCs of Governance

Tom Hyatt is a partner in the Washington. D.C. law firm of Dentons US LLP and an authority on nonprofit governance. This blog is excerpted from a presentation he made recently at the Commonfund...
Investment Strategy | Insights Blog

Diverse and Emerging Manager Programs: Worth Doing Well

Michael Rowland is the Commonfund Institute Summer Intern.  He is a rising senior at Case Western Reserve University. He is majoring in Finance and Accounting.  What are Diverse and Emerging Manager...
Investment Strategy | Insights Blog

Recession – Maybe This Time is Different

The July Federal Open Markets Committee (FOMC) meeting signaled the end of central bank rate normalization with the first rate cut in more than a decade. The last time the FOMC cut rates was in...
Market Commentary | Insights Blog

Chart of the Month | Economic Expansions Getting Longer

Following the July FOMC meeting and with investors digesting the first rate cut since 2008 it is important to recognize that the domestic economy is now experiencing the longest period of economic...
Diversity | Insights Blog

Commonfund Hosts Girls Who Invest at NYC Event

Girls Who Invest (GWI) is an organization focused on bringing more women into the field of asset management, a goal that Commonfund strongly supports. Every year, GWI invites rising juniors into...
Governance And Policy | Insights Blog

The 5 Top Stewardship Imperatives

Christopher K. Merker, PhD, CFA, is a financial advisor and director of Private Asset Management at Robert W. Baird & Co. and an adjunct professor at Marquette University. He is also the co-author of...
Governance And Policy | Insights Blog

Higher Education: Philanthropy is an Adjunct, Sensible Public Policy Deserves Tenure

In the last few months, high profile nonprofit institutions have come under intense scrutiny for ethical dilemmas pertaining to the stewardship of resources meant to support mission. This is Part...
Market Commentary | Insights Blog

Chart of the Month | Defensive Stocks at a Premium

The valuation premium (forward price/earnings) of defensive stocks versus cyclicals has climbed steadily over the last seven months. Limited risk appetite, slowing growth, low interest rates and...
Private Capital | Insights Blog

Building a Private Equity Allocation

Building a private capital allocation that makes a difference to your portfolio takes time and dedication. The first step is deciding to make a meaningful allocation to private capital. Then, to...
Perspectives | Insights Blog

The Case for Using the Higher Education Price Index® (HEPI) to Define Inflation for Colleges

When calculating return targets for an endowment portfolio, a conventional piece of the equation is often the Consumer Price Index (CPI). CPI plus 5% is the common short-hand formula for institutions...
Investment Strategy | Insights Blog

Investment Manager Fees Part II: Creating Alignment

In Part I of this blog series, “Investment Manager Fees: Out of Sight, Out of Mind”, we discussed our approach to determining the value of an asset manager and how we might calculate a fair price for...
Perspectives | Insights Blog

Nonprofit Hospitals - Big Business in Nonprofit Clothing?

In the last few months, high profile nonprofit institutions have come under intense scrutiny for ethical dilemmas pertaining to the stewardship of resources meant to support mission. This is Part Two...
Perspectives | Insights Blog

Summer Reading from the Stewardship Academy Faculty

As the last week of June approaches, investment stewards begin to prepare for summer – a time for relaxing, reflecting, and reading. We asked faculty members from the Investment Stewardship Academy,...
Market Commentary | Insights Blog

Chart of the Month | Conflicting Signals in Stock and Bond Markets

The Bond markets’ expectations of U.S. Federal Reserve (Fed) rate cuts changed drastically last Friday on the news of President Trump’s intention to impose tariffs on Mexico, in an attempt to...
Diversity | Insights Blog

Museums and Cultural Institutions: To Accept or Not to Accept, That Is the Question

In the last few months, high profile nonprofit institutions have come under intense scrutiny for ethical dilemmas pertaining to the stewardship of resources meant to support mission. In a three-part...
Responsible Investing | Insights Blog

Commonfund Forum: A Carbon Neutral Event in 2019

In just two years Commonfund will celebrate its 50th anniversary as a non-profit investment manager for educational endowments, foundations and other tax-exempt investors. Throughout those almost...
Investment Strategy | Insights Blog

Investment Manager Fees: Out of Sight, Out of Mind

One of the most pressing questions facing fiduciaries is that of investment management fees. We think it is a healthy and necessary discussion, as even small fees can have a big impact on performance...
Risk Management | Insights Blog

Risk Management and Operations: 5 Takeaways from Commonfund Forum 2019

The majority of investors’ attention is often focused on the performance of the funds or managers in their portfolio.  And rightfully so.  The numbers that appear on statements month after month will...
Investment Strategy | Insights Blog

Taking a Fresh Look at Spending Models

Investors have limited control over the returns their portfolios generate. They have more control over their spending. That doesn’t make it easy. Compared to some earlier periods, volatility in the...
Perspectives | Insights Blog

Surprising Stewardship Lessons from the Miracle on the Hudson

“When you’ve suffered a complete loss of engine thrust over the largest city in America, you must act quickly and independently to address the developing situation. But, you must also trust in the...
Outsourced CIO | Insights Blog

5 Key Questions: Comparing Fees of OCIO Providers

The market for Outsourced Chief Investment Officer (“OCIO”) services has boomed over the last decade.  Today, OCIO assets under management are by some estimates nearly $1.5 trillion, 2.5 times the...
Market Commentary | Insights Blog

Chart of the Month | U.S. Jobs Machine Keeps Cranking

This month we turn our attention to the economy and, specifically, employment. As investors contemplate when this historically long period of economic growth might end, employment trends are one of...
Perspectives | Insights Blog

Donor Advised Funds: Changing the Philanthropic Landscape for Higher Education

Donor Advised Funds (DAFs) are the fastest growing giving vehicle in philanthropy. The Council on Foundations defines DAFs as: “A type of charitable giving fund that is established by a donor with an...
Perspectives | Insights Blog

A sit-down with Richard Fisher

As a follow-on to the Commonfund Forum 2019 panel discussion, The Global Economy and the Return of Risk, Richard Fisher, former President and CEO of the Federal Reserve Bank of Dallas,  further...
Private Capital | Insights Blog

Private Market Investing vs Public Market Investing, What’s the Big Difference?

The first step of successful private market investing is to learn what private capital is, what its risks and rewards are, and how it differs from public market investing. Private capital provides...
Perspectives | Insights Blog

Commonfund Forum 2019 Attendee Statistics [Infographic]

Commonfund recently hosted its 21st annual Commonfund Forum in Orlando, Florida. The event brought together institutional investors to engage in a two-day conference to explore cyclical trends and...
Perspectives | Insights Blog

Study of Independent Schools Key Findings [Infographic]

Schools participating in the Commonfund Benchmarks Study® of Independent Schools (CSIS) for the 2018 fiscal year reported an average return (net of fees) on their endowment assets of 7.4 percent. The...
Investment Strategy | Insights Blog

The Fallacy of Manager Diversification – How “Horse Races” Can Increase, Not Reduce Risk

On the surface, hiring two (or more) multi-asset managers to manage an entire portfolio may seem like a good idea. Intuitively, it would seem to reduce manager concentration risk, and provide...
Market Commentary | Insights Blog

Chart of the Month | One Reason Investors Are Feeling Uneasy

Investors of all types, including those that represent institutions, are clearly feeling more uneasy than they have in years. It isn’t just the spike in stock market volatility that buffeted...
Investment Strategy | Insights Blog

Getting Started in Responsible Investing

The biggest challenge in implementing any type of responsible investment program is in clearly defining and prioritizing those issues most relevant to an organization. Although it may seem a...
Private Capital | Insights Blog

5 Steps to Success in Private Capital Investing

Investors participate in private equity markets for two main reasons: to pursue increased investment return and to add portfolio diversification. Even well-informed investors who are experienced in...
Investment Strategy | Insights Blog

Stormy Markets, Steady Institutional Investors

This blog is reprinted with permission by Net Assets, published by the National Business Officers Association (NBOA).  The original article can be found here. Investment guidelines enable...
Governance And Policy | Insights Blog

What’s in the Data? HEPI 2018 Highlights

Commonfund Higher Education Price Index (HEPI) data show that inflation for colleges and universities was 2.8 percent for fiscal year 2018, a decline from last year’s 3.3 percent but higher than the...
Responsible Investing | Insights Blog

Identifying an “E” Factor

Over the past year the Commonfund investment teams have undertaken research to identify and isolate a new factor associated with the environmental sustainability of a stock (or a portfolio of...
Responsible Investing | Insights Blog

Applying the Endowment Model to Diversity and Inclusion

Commonfund recently launched a Diversity Office, a formal, cross departmental effort focused on diversity and inclusion. The mission of the Commonfund Diversity Office is to intentionally promote and...
Investment Strategy | Insights Blog

A Cost-Effective Approach to Hedge Fund Allocations: Part 2

Let’s start with a quick recap of Part 1 of this story, which can be boiled down to three main points:  Investors often spend too much for market beta, paying “2 and 20” for hedge funds that deliver...
Investment Strategy | Insights Blog

A Cost-Effective Approach to Hedge Fund Allocations: Part 1

At the risk of beating a dead horse, hedge funds are not an asset class.  This is especially true in the way in which Commonfund selects and constructs its hedge fund portfolios: focusing...
Investment Strategy | Insights Blog

Are You Ready for the Next Crisis?

Ten years ago Lehman Brothers failed, representing the largest bankruptcy in history, and accelerating a global financial crisis that would knock many non-profit portfolios backward. This came on the...
Perspectives | Insights Blog

7 Major Findings - Commonfund Benchmarks Study of Healthcare Organizations

Fifty-six healthcare organizations participated in the 2016–2017 Commonfund Benchmarks Study® of Healthcare Organizations. These organizations reported an average investable asset pool of $2.1...
Responsible Investing | Insights Blog

Viewpoint: Responsible Investing - Read All About It

The new and newsworthy in this year’s Council on Foundations–Commonfund Study of Investment of Endowments for Private and Community Foundations® (CCSF) is headlined by responsible investing. No other...
Investment Strategy | Insights Blog

Five Questions to Ask Your Advisor: Costs of Portfolio Management

Costs matter. With expectations for lower market returns over the coming years, every basis point of net performance is particularly important. Furthermore, the compounding effect of high fees can...
Governance And Policy | Insights Blog

The Four P’s of Investment Decisions: Lessons from the Commonfund Institute

Three days after becoming Executive Director of the Commonfund Institute, I found myself at Yale University in New Haven giving welcoming remarks at our annual educational program.  Although I will...
Investment Strategy | Insights Blog

Equity Portfolio Construction – Through a Risk Factor Lens

At Commonfund, we aim to build multi-manager, active risk equity portfolios with a clear objective of consistent outperformance versus passive policy benchmarks. Our approach is to take intentional...
Responsible Investing | Insights Blog

What are the Differences Between SRI and ESG?

The Challenges of Terminology There are a great many terms referring in some way to practices related to responsible investing: socially responsible investing; mission-related investing; impact...
Investment Strategy | Insights Blog

Bonds: Unwanted and Unloved but not Unnecessary

Well, the party may finally be over. Like the college dean who shuts down the campus party, the Fed has finally taken away the interest rate punch bowl that investors have enjoyed for so long. It may...
Investment Strategy | Insights Blog

Real Estate Credit Environment: Risk Off - Risk On

Earlier last year real estate markets received a scare as CMBS spreads widened, particularly in lower rated and more junior tranches.  Additionally, one of the most respected U.S. real estate...
Investment Strategy | Insights Blog

Investing in Diversity

At Commonfund, we scour the globe to find investment managers that we believe have the ability to consistently produce excess returns (alpha) over and beyond their benchmark. But alpha alone is not...
Diversity | Insights Blog

10 Key Takeaways from Commonfund Forum 2018

Commonfund recently hosted its 20th annual Commonfund Forum in Orlando, Florida. The event brought together 400 institutional investors from the U.S., Puerto Rico, the Virgin Islands, Canada, Chile...
Perspectives | Insights Blog

Forum 2018 Attendee Statistics [Infographic]

We recently hosted our 20th annual Commonfund Forum in Orlando Florida. The event brought together institutional investors to engage in a two-day conference to explore cyclical trends and tactical...
Perspectives | Insights Blog

Key Findings from 2017 NACUBO-Commonfund Study of Endowments [Infographic]

For the fiscal year ended June 30, 2017, educational endowments reported a 12.2 percent return as the 10-Year return fell to 4.6 percent. In this infographic, we report the top findings from the 2017...
Investment Strategy | Insights Blog

Baring Their Teeth – FAANGs Take a Bite Out of the Equity Market

Narrow market leadership in the U.S. and Emerging Markets proves challenging for active managers Narrow markets are not uncommon to equity investors. They tend to manifest themselves during the best...
Investment Strategy | Insights Blog

A Gap In Reality

With the release of the annual NACUBO-Commonfund Study of Endowments (NCSE) comes the obligatory comparison of 1-year returns. “How did we do relative to the 12.2 percent average return” is a...
Perspectives | Insights Blog

Despite Strong FY2017, Endowments Report Decline in Ten-Year Return

Despite 12.2 percent return for FY2017, educational endowments report a decline in their 10-Year return while large institutions lead increase in effective spending rate Data gathered from 809 U.S....
Governance And Policy | Insights Blog

When Leaks Turn into Floods: Challenges Facing Higher Education

2017’s tax legislation is the latest in a growing list of challenges facing higher education. The new excise taxes on endowment earnings of the largest private universities, coupled with the...
Investment Strategy | Insights Blog

Bonds May Not Be Loved, But They Shouldn't Be Forgotten

Summary TODAY, THERE IS A GOOD DEAL OF HAND WRINGING OVER THE RISK OF RISING RATES. WHILE RISING LONG-TERM RATES COULD BE A HEADWIND FOR CORE FIXED INCOME, AS LONG AS RATES RISE FAIRLY MODESTLY THE...
Governance And Policy | Insights Blog

Tax Reform: CPI Plus More

It was another taxing weekend (literally) at Commonfund as we digested 1,097 pages of the conference agreement for the tax reform bill (the “Tax Act”) and its implications for our country and for the...
Governance And Policy | Insights Blog

The Tax Man Cometh (And Not Just for the Ivies)

UPDATE: Since this blog was published there have been further developments related to the Tax Cuts and Jobs Act.  Please see our post Tax Cuts and Jobs Act: CPI Plus More for our latest thinking....
Governance And Policy | Insights Blog

Spending Policy: Is Yours Ready for the Next Downturn?

In most Investment Policy Statements there is often a reference to two important, but conflicting, objectives: one, to preserve the purchasing power of the long-term portfolio in real terms, and two,...
Investment Strategy | Insights Blog

Emerging Market Equities Turn the Corner

As we progress through calendar year 2017, we have witnessed the continuation of the equity bull market started in 2009. One difference however, is that leadership has turned (finally!) to non-U.S...
Governance And Policy | Insights Blog

On Complacency | Why Risk Management Always Matters

Like nearly everything in the financial markets, risk is cyclical.  History repeats itself.  The echoes of past crises are always heard in present ones, yet new crises are rarely predicted and not...
Outsourced CIO | Insights Blog

A Primer on Outsourced Investment Management

Once seen primarily as a solution for small institutions with limited resources, outsourcing of the investment management function is now widespread, with a broad range of long-term investors –...
Perspectives | Insights Blog

Key Findings from 2016 Council on Foundations-Commonfund Study of Foundations [Infographic]

For the fiscal year ended December 30, 2016, participating private foundations reported an average return of 6.4 percent while participating community foundations reported an average return of 7.3...
Investment Strategy | Insights Blog

How Much Beta is in Your Equity Portfolio?

Leveling the Field in the “Tug of War” Between Active and Passive… Active Equity Manager Universal Objective: Outperform the Passive Alternative It’s undeniable that every active equity manager’s...
Investment Strategy | Insights Blog

Making the Case for Natural Resources Investing

The natural resources sector is often characterized as cyclical, as producers and service providers experience underlying exposure to and commensurate volatility of commodities in the oil and gas,...
Investment Strategy | Insights Blog

Thoughts on the Role of Credit in Institutional Portfolios

While most institutional portfolios have allocations to investment grade corporate credit, as a strategic allocation high yield and emerging market credit (liquid credit) are sometimes overlooked....
Risk Management | Insights Blog

WannaCry? WannaRun, WannaHide! Managing Cybersecurity Risk

Over the last year there has been no shortage of things to keep investors, asset managers, and risk managers concerned. Despite these exogenous shocks most equity markets have continued to shake off...
Investment Strategy | Insights Blog

Flexing Your Global Portfolio Can Lead to ACWI Fatigue, but Don't Throw in the Towel Yet

Like the build-up of lactic acid in your muscles after a strenuous workout, the underperformance of Morgan Stanley Capital International All Country World index (MSCI ACWI) vs. the Standard & Poor’s...
Investment Strategy | Insights Blog

Active Fee Management: Notes from the Front Lines

Few topics get investors’ attention as much as fees.  We wouldn’t be human if we all didn’t want to know, in detail, how much something costs.  In the world of investing, fees are an even more...
Investment Strategy | Insights Blog

Maintaining Purchasing Power in Today’s Environment | CPI + 5%

At Commonfund, we understand the challenge institutions face of maintaining the purchasing power of their endowment. In fact, achieving a rate of return sufficient to cover inflation, distributions...
Perspectives | Insights Blog

Key Findings from NACUBO-Commonfund Study of Endowments [Infographic]

For the fiscal year ended June 30, 2016, educational endowments reported a -1.9 percent return as the 10-Year return fell to 5.0 percent. In this infographic, we report the top findings from the 2016...
Investment Strategy | Insights Blog

The Crowded Liquidity Trade

The liquidity markets have experienced one of the largest disruptions since the inception of SEC Rule 2a-71 in the early 1970’s.  Over the past few months, we have seen a massive shift of investor...
Perspectives | Insights Blog

Commonfund Forum 2017 Attendee Statistics [Infographic]

We recently hosted our 19th annual Commonfund Forum in San Antonio Texas. The event brought together institutional investors to engage in a three-day conference to explore cyclical trends and...
Perspectives | Insights Blog

10 Key Takeaways from Commonfund Forum 2017

Commonfund recently hosted its 19th annual Commonfund Forum in San Antonio Texas.  The event brought together about 450 institutional investors from the U.S, Puerto Rico and Canada to engage in a...
Investment Strategy | Insights Blog

Long-Term Trends for Long-Term Investors

Nonprofit institutions have the distinct advantage of having the longest time horizon of any investors – often perpetuity.  This affords an opportunity to consider investments based on secular trends...
Investment Strategy | Insights Blog

What do the Cable Television and Hedge Fund Industries Have in Common?

These industries may seem an odd pairing, but both are in the midst of a disruption-led, industry-wide rationalization process. The two industries share in common a historically evolved “bundling”...
Perspectives | Insights Blog

Constraints Faced by Healthcare Endowments

As a result of the evolving landscape of the healthcare industry, organizations are increasingly being shaped by pressures affecting both the revenue and expense sides of the income statement. On one...
Investment Strategy | Insights Blog

Private Credit Opportunities – Direct Lending to U.S. Middle Market Companies

Much has been made of the challenges endowment, foundation and nonprofit investors face in achieving a CPI+ five percent return target. One way to improve the probability of attaining this goal is to...
Governance And Policy | Insights Blog

Does Your Investment Policy Statement Account for Risk?

Successful investing for long-term funds requires a strategic plan. This is true despite – indeed, because of – the fact that the future is unknowable. The plan must be specific, embodying in...
Investment Strategy | Insights Blog

Healthcare Endowment Management: 3 Questions to Consider

Mounting cost pressures are forcing small and mid-sized nonprofit healthcare organizations to consider adopting endowment management practices similar to those used elsewhere in the nonprofit sector....
Governance And Policy | Insights Blog

Drafting Your Investment Policy Statement: 10 Critical Issues

Endowed institutions differ in their missions, capabilities and resources, and investment policy statements naturally mirror these differences.  In that sense, there is no single ‘right’ investment...
Investment Strategy | Insights Blog

Venture Capital - Looking Forward and Upward

Beginning in the second half of 2015, there was growing caution that started to impact pricing and investment activity in early 2016. This valuation cooling period and subsequent shift in mindset...
Investment Strategy | Insights Blog

A False Sense of Diversification?

As we have undergone the process of re-underwriting all of Commonfund’s equity managers and funds over the last 6 months, we have tackled anew the age old question of how many funds does one...
Governance And Policy | Insights Blog

How Does Board Structure Affect Performance?

The structure of a board has an important influence on its effectiveness, and being cognizant of these matters is essential to improving a board’s performance. In this article, we’ll discuss four...
Investment Strategy | Insights Blog

Real Estate – Rates, Rates, Rates

“There are three things that matter in property: location, location, location”. While the age-old adage still holds in many respects, real estate risks, as with the risks associated with all asset...
Governance And Policy | Insights Blog

Fiduciary Responsibility: A Board’s Purpose and Roles

Excellent boards are made, not born. Achieving excellence in board governance requires success in four crucial areas: capable leadership, a sound organizational structure, attention to fiduciary...
Governance And Policy | Insights Blog

Where Did Our Operating Income Go?

Treasury managers face a new challenge to an old problem. Their institutions historically have relied on operating investment income to provide a necessary influx to operating budgets. Prior to 2008,...
Investment Strategy | Insights Blog

It's Not Easy Being Active

It’s not easy being an active equity manager these days. As the chart below depicts, active managers have just come through the worst period for returns in several decades. The chart shows the...
Outsourced CIO | Insights Blog

The Billion Dollar Dilemma - What is the Right Governance Model for your Institution?

Finding the right investment governance model for your institution isn’t about size. In the hyper-competitive world of endowment management, something curious happens when the word used to describe...
Governance And Policy | Insights Blog

Five Laws that Led to Uniformity in Nonprofit Governance

With each state having its own court system, uniformity among the states did not exist. While there was agreement on basic common-law trust principles, variations still emerged. As the American...
Responsible Investing | Insights Blog

Better Understanding Responsible Investing Practices

How can you do the most good, with limited resources, when facing enormous problems? That question lies at or near the heart of every decision at a foundation. This is true of the grant dollars which...
Governance And Policy | Insights Blog

A Framework for Nonprofit Governance

Two important laws enacted in the last 15 years have had an impact far beyond the intent of their original authors, causing major, if little-noticed, changes in nonprofit governance. The...
Investment Strategy | Insights Blog

Integration of ESG Factors in Practical Steps

In the current climate of slow global economic growth and resource constraints at many institutions, integration of ESG considerations in an organization’s investment portfolio may be perceived as a...
Governance And Policy | Insights Blog

Bridging the Gap: Carbon and Fiduciary Responsibility

Most institutional investor discussions and actions regarding global warming have been at two ends of the spectrum: either divest from fossil fuels entirely or remain fully invested. A better...
Responsible Investing | Insights Blog

Responsible Investing for Foundations

Commonfund and the Council on Foundations are thrilled to announce the release of the 2016 Council on Foundations – Commonfund Study of Responsible Investing. It is the largest and most detailed...
Outsourced CIO | Insights Blog

Top Ten Risks for Practicing CIOs

A Chief Investment Officer’s primary responsibility is to identify and clearly communicate his/her portfolio’s risks to his/her Board, Investment Committee and/or client(s).  About eighteen months...
Governance And Policy | Insights Blog

Common Concerns about Responsible Investing

Discussions about whether responsible investing strategies help or hurt investment performance are complicated by the fact that, there are several broad categories of responsible investing practice...
Governance And Policy | Insights Blog

Operating Charity Implements a Risk-Based Investment Policy

An operating charity in the Northeast is in the process of implementing a risk-based investment policy for its $30 million endowment. The organization’s seven-member Investment Committee includes...
Outsourced CIO | Insights Blog

Deciding on an OCIO Provider: Three Factors to Consider

There are three main factors an institution will need to weigh in deciding if working with an OCIO provider is right for them. Those are: Degree of Discretion: What role do the institution’s board...
Responsible Investing | Insights Blog

Responsible Investing: Terminology and Background

The terms socially-responsible investing (SRI), mission-related investing, impact investing and environmental, social and governance (ESG) investing – all frequently grouped under the heading of...
Governance And Policy | Insights Blog

What is an OCIO?

Outsourced investment management, once primarily a solution for small institutions with limited resources, is now used by a broad range of long-term investors. When properly implemented, outsourcing...
Investment Strategy | Insights Blog

Hedge Funds: How Many (or Few) Does it Take?

It’s straightforward to get an answer to that question, at least superficially: draw at random from a manager universe, build hypothetical portfolios with the selected managers, track performance,...
Governance And Policy | Insights Blog

Is Currency an Asset Class?

Currency risk can best be described as the surprise impact that currency exposure has on an investment portfolio. Although currency risk typically confounds investors, it is easy to measure – it is...
Responsible Investing | Insights Blog

Sample Investment Policy Statement Rider for Responsible Investing

A number of clients and prospects have asked how their Investment Policy Statement (IPS) can be amended to accommodate responsible investing strategies. In response, we have prepared a rider which...
Governance And Policy | Insights Blog

Six Key Questions To Ask OCIO Providers

“Outsourced CIO” (or OCIO) is a term that might not be familiar to many. In the past it has been defined as a traditional consulting model in which the process of interviewing potential investment...
Governance And Policy | Insights Blog

New Environmental Regulations and the Impact on Fiduciaries

Developments in world financial markets seem to occur more quickly every year, requiring ever-higher levels of expertise and experience on the part of investment committees. Climate change is a more...
Investment Strategy | Insights Blog

Size: It's Complicated

Assets under management (AUM) among hedge funds has always been characteristically top-heavy, with the majority of capital in the hands of a relatively small number of managers. While the hedge fund...
Governance And Policy | Insights Blog

Calculating Investment Management Costs

The following methodology may be of use in helping you to understand more fully what your organization pays for investment management costs. Identify the fees you pay at the overall portfolio level...
Risk Management | Insights Blog

The Curious Case of Risk Exposures in Diversified Portfolios

Our research at Commonfund has found that a 70/30 stock/bond portfolio  has north of 99 percent of its risk, as measured by standard deviation, allocated to equities. Thus, portfolio risk typically...
Outsourced CIO | Insights Blog

5 Things to Consider When Choosing an OCIO

Nearly all CFOs and investment committees consider it. And more than ever are acting upon it: investigating the possibility of an Outsourced CIO (OCIO) to manage their institution’s investments. The...
Risk Management | Insights Blog

Defining Risk For Your Organization

Merriam-Webster’s defines risk as the “possibility of loss or injury.” The financial profession — borrowing from Modern Portfolio Theory — uses the standard deviation of a portfolio’s returns to...
Governance And Policy | Insights Blog

Impact Investing

Recently, Commonfund convened an expert panel of investment managers to hold  a roundtable discussion and take a closer look at the different impact investing strategies being implemented today. The...
Governance And Policy | Insights Blog

ESG: What is it?

Generally speaking, Environmental Social and Governance, or ESG for short, is used to describe a group of characteristics that can have a material impact on the long-term success of a company and,...
Private Capital | Insights Blog

Straight Talk About Private Equity

For reasons unknown, many investors assume that private equity may have lost its edge as a key allocation for their portfolios. This perception, however, may not align with reality. By taking a...
Governance And Policy | Insights Blog

10 Point Checklist to Get Governance Right

The regulatory and legislative landscape continues to become more rigorous for nonprofit organizations. In an atmosphere of increasing calls for accountability, boards and senior staff need to take...
Private Capital | Insights Blog

How liquid are Private Capital Investments?

In the wake of the Global Financial Crisis, institutional investors were rightfully concerned about the liquidity profiles of their long term portfolios. Although markets have recovered substantially...