A Chief Investment Office “down the hall.” That’s what we aim to be at Commonfund.
Our Mission
As an OCIO, our goals are aligned with the institutions we work with and focused on how we can best position portfolios in ever-changing market environments. Part of that is guiding conversations around policy and ultimately setting a strategic plan that everyone supports. Our role is to create an environment where tough questions can be asked and to help move decisions forward. The Commonfund OCIO team is constantly thinking through our relationship and reimagining ways to work with those we serve. Our objective is to get to know our clients as well as they know themselves and to be a partner that understands their mission and goals.
Defining Roles
At the onset of a new relationship, we spend time discussing how an investment committee and staff will work with us in an OCIO model. Defining the roles and responsibilities of all parties early on is key to ensuring a successful partnership. A committee’s focus is strategic, thinking big picture about the institution and where they want it to be years from now. We support committees through those conversations with analyses and anecdotal experiences. The team working with the institution helps guide conversations related to return objectives, risk profile, and, if appropriate, an illiquidity budget. We also serve in the role of portfolio oversight, choosing managers, and executing an asset allocation implementation. While a lot of work is done upfront, we revisit conversations constantly to ensure that the committee, staff, and Commonfund team are aligned.
Relationship Management Function
The relationship management role aims to serve as the central point of contact for all aspects of a partnership and connects OCIO clients with the full range of Commonfund resources. In preparation for committee meetings, we have formal check-ins with committee chairs and staff. We have open discussions to ensure that we are covering top-of-mind topics for the institutions we partner with and cover any timely or topical items outside of standard portfolio reviews. One way to ensure we have a structured path forward is by creating a future meeting agenda plan to serve as our playbook for the partnership. This agenda plan is not static but evolving as each client’s needs and focus are unique to them. We look ahead one to two years and plan topics that cover a broad range of issues. It includes strategic policy topics to be reviewed at least annually like asset allocation and liquidity stress testing as well as topics that may have an alternative cadence, such as a private equity deep dive or spending policy review.
We believe that OCIO clients benefit greatly from access to the full scope of services and people at the organization, because we are an extension of your institution. The relationship function helps to ensure that those connections are established early on. Three main areas complement the day-to-day team: Investments, Operations, and Education.
- Within Investments, we make introductions and invite colleagues focused on specific asset classes to provide background on the market environment or what they are hearing from managers in client portfolios.
- Within Operations, we connect the Investor Services Team to staff to ensure the institution’s operational needs are fully met, to ease some of the day-to-day and ongoing burden that can take up much of the staff’s time.
- Within Education, we provide education to new Committee and Board members on the endowment and how the OCIO model is structured. We also leverage Commonfund Institute and the work we do related to benchmark studies, whitepapers, conferences, and making introductions to other like-minded nonprofit institutions.
What Makes for a Successful Partnership
The most successful partnerships between an institution and its OCIO are collaborative, transparent, and aligned. And while each relationship is unique, we see themes that help drive that success. First is the delineation of responsibility. As mentioned earlier, each party plays a critical role in the partnership. Knowing where to focus your energy helps to keep goals on track. A related consideration is time. As a member of a committee, you’re tasked with stewarding a perpetual pool of assets toward a goal, and moving a mission forward takes commitment and engagement. Making yourself available to your committee and OCIO allows for more opportunities to connect on the important issues that the institution may be facing. Many committees meet on average four times per year, though some may meet more frequently, some less often. Making time is necessary to reach decisions and plan for the future. Finally, communication is key. Partnerships are not successful without all groups being willing to listen, participate, and have an open dialogue. Without these pieces, frustrations and friction can occur. In the end, each relationship is unique and requires the OCIO to adapt to the needs of the organization such that we can truly be the Chief Investment Office “down the hall.”
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