Industry Knowledge

Five Takeaways from Treasury Symposium 2017

Posted by Jon Speare on Feb 23, 2017

Topic: Asset Allocation Governance and Policy Industry Knowledge Operating Assets

Treasury Symposium 2017 was held in New Orleans earlier this month. 285 senior financial officers from over 100 large universities participated in the strategic discussions. Once again, the takeaways from the three-day Symposium were thought-provoking as well as cautionary for the higher education industry.

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Constraints Faced by Healthcare Endowments

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Feb 17, 2017

Topic: Asset Allocation Industry Knowledge

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.

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Commonfund Hires Deborah Spalding as Investment Officer

Posted by Commonfund on Feb 7, 2017

Topic: Industry Knowledge People

Commonfund, a prominent investment manager for endowments, foundations and public pension investors, is pleased to announce that Deborah Spalding will be joining as Managing Director & Investment Officer effective February 21, 2017. Ms. Spalding will be responsible for providing asset allocation recommendations, portfolio oversight and analysis, and managing the tactical rebalancing of client portfolios.

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2016 NACUBO-Commonfund Study of Endowments Results Released

Posted by Commonfund Institute on Jan 31, 2017

Topic: Asset Allocation Governance and Policy Industry Knowledge

Data gathered from 805 U.S. colleges and universities for the 2016 NACUBO-Commonfund Study of Endowments® (NCSE) show that participating institutions’ endowments returned an average of -1.9 percent (net of fees) for the 2016 fiscal year (July 1, 2015 – June 30, 2016). This year’s negative return, following the low 2.4 percent return reported for FY2015, contributed to a decline in long-term 10-year average annual returns to 5.0 percent from last year’s 6.3 percent.

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Does Your Investment Policy Statement Account for Risk?

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Jan 20, 2017

Topic: Governance and Policy Industry Knowledge Investment Strategy Risk Management

In the past, many investment policy statements gave relatively cursory treatment to risk, its quantification and its potential impact on the asset pool. Market collapses and credit crises demonstrated that many institutions’ portfolios carried unacknowledged risks, that their risk profiles in general were higher than they thought, and that the risk tolerance of their fiduciaries was lower than acknowledged. Today, then, it is entirely appropriate to put risk at the top of the process of investment policy development.

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Healthcare Endowment Management: 3 Questions to Consider

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Jan 10, 2017

Topic: Governance and Policy Industry Knowledge Investment Strategy

The healthcare business model is changing. 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. In the face of declining reimbursement from insurance companies and governmental payers, nonprofit healthcare organizations are confronted with an unprecedented series of challenges.

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Assessing the State of Healthcare

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Jan 10, 2017

Topic: Governance and Policy Industry Knowledge

Healthcare organizations are challenged to maintain positive operating margins in the face of declining insurance reimbursements and governmental payers.

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Drafting Your Investment Policy Statement: 10 Critical Issues

Posted by Bill Jarvis, Executive Director, Commonfund Institute | John Griswold, Founder and Senior Advisor, Commonfund Institute on Dec 12, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy

There is no single ‘right’ investment policy statement; each institution’s board must craft a statement that responds to the needs of the institution and the preferences and risk tolerances of the trustees. Annual review of the statement by the board can help to ensure...

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The Investment Policy Statement

Posted by Bill Jarvis, Executive Director, Commonfund Institute | John Griswold, Founder and Senior Advisor, Commonfund Institute on Dec 9, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy

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 concrete terms the best thinking of the board of trustees about the investment pool, its goals and purposes; but it also needs to be sufficiently flexible to guide the board through environments that may be very different from those prevailing at the time of its adoption.

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2015 CSHO Study of Healthcare Organizations Released

Posted by Commonfund Institute on Nov 1, 2016

Topic: Asset Allocation Governance and Policy Industry Knowledge

Data gathered in the 2014-2015 Commonfund Benchmarks Study of Healthcare Organizations (CSHO) reveals investment challenges facing hospitals. Participants report 4.4 percent return for FY 2014 but -1.6 percent for FY2015.

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2016 HEPI Report Released

Posted by Commonfund Institute on Oct 31, 2016

Topic: Governance and Policy Industry Knowledge Operating Assets

The annual Commonfund Higher Education Price Index (HEPI) report provides an analysis of HEPI and the cost factors associated with the index. Download your copy today to determine increases in funding necessary to maintain both real purchasing power and investment at your institution.

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How Does Board Structure Affect Performance

Posted by Bill Jarvis, Executive Director, Commonfund Institute | John Griswold, Founder and Senior Advisor, Commonfund Institute on Oct 19, 2016

Topic: Governance and Policy Industry Knowledge

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 major factors that relate to the structure and composition of effective boards.

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Carbon and Investment Implications for Fiduciaries: Hosted by Intentional Endowments Network

Posted by Commonfund on Sep 28, 2016

Topic: Industry Knowledge Responsible Investing

Commonfund experts Jess Gaspar and Ethan Levine join host, Jacquelyn Smith from Intentional Endowments Network to discuss insights from their extensive research they have down over the past two years on low carbon investing challenges across both public and private markets. The Intentional Endowments Network webinar originally aired on Tuesday, September 27, 2016.

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Fiduciary Responsibility:
A Board’s Purpose and Role

Posted by Bill Jarvis, Executive Director, Commonfund Institute | John Griswold, Founder and Senior Advisor, Commonfund Institute on Sep 27, 2016

Topic: Governance and Policy Industry Knowledge

Achieving excellence in board governance requires success in four crucial areas: capable leadership, a sound organizational structure, attention to fiduciary responsibility and a culture that binds the board members to each other in a cohesive unit.

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Bridging the Budgetary Gap: Where Did Our Operating Income Go?

Posted by Michael Strauss, Chief Investment Strategist and Chief Economist | Jon Speare | Ryan Driscoll, CFA, Director on Sep 15, 2016

Topic: Industry Knowledge Operating Assets Responsible Investing

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, risk free or minimal risk investments provided support for operations with returns that are currently unimaginable.

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Where Did Our Operating Income Go?

Posted by Michael Strauss, Chief Investment Strategist and Chief Economist | Jon Speare | Ryan Driscoll, CFA, Director on Sep 15, 2016

Topic: Fixed Income Governance and Policy Industry Knowledge Operating Assets

Treasury managers face a new challenge to an old problem. Their institutions historically have relied on operating income to provide a necessary influx to operating budgets. Prior to 2008, risk free or minimal risk investments provided support for operations with returns that are currently unimaginable. The concept of a risk-free instrument yielding anything significantly above 0% in the future does not take into account the post crisis world of capital markets, specifically cash markets. So, the world of five percent cash returns is gone, and has little chance of re-emerging. This leaves a shortfall in how treasury managers balance budgets and fund capital initiatives going forward.

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Viewpoint: A Firmer Foundation

Posted by Commonfund Institute on Sep 2, 2016

Topic: Governance and Policy Industry Knowledge Responsible Investing

How long is the long term? A year ago, private and community foundations appeared to many observers to have recovered from the losses suffered in the 2008–09 global financial crisis. Double-digit investment returns had been reported in every year except FY2011 and FY2014, donations to community foundations had returned to their pre-crisis levels and the investment strategies of successful foundations were once again followed closely in the financial press.

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2015 CCSF Study of Foundations Released

Posted by Commonfund Institute on Aug 23, 2016

Topic: Asset Allocation Governance and Policy Industry Knowledge

Data gathered in the 2015 Council on Foundations - Commonfund Study of Investment of Endowments for Private and Community Foundations (CCSF) shows Foundations' spending in support of mission holds steady, despite second year of declining investment returns.

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The Billion Dollar Dilemma

Posted by Commonfund on Aug 12, 2016

Topic: Governance and Policy Industry Knowledge Outsourced Investing

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 the size of an endowment changes from starting with the letter “m” to a word that starts with the letter “b.” Yes, Billion. With a “B.”

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Commonfund Roundup
07-29-16

Posted by Commonfund on Jul 29, 2016

Topic: Equities Industry Knowledge Investment Strategy Market Commentary Responsible Investing

Commonfund's July Roundup features the Commonfund Study of Responsible Investing: Foundations Survey and Press Release; a webcast on the FY2016 Equity Performance Review, hosted by Mark Anson, Chief Investment Officer, Kris Kwait, Head of Investments, and Keith Luke, President, Commonfund Securities, Inc.; along with the latest weekly economic podcasts by Chief Economist, Michael Strauss.

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Five Laws that Led to Uniformity in Nonprofit Governance

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Jul 26, 2016

Topic: Governance and Policy Industry Knowledge

As the American economy began to function on a more truly national basis in the closing decades of the nineteenth century, it became apparent that users of the legal system – including corporations, financial institutions and trustees – would benefit from a greater degree of legal uniformity in nonprofit governance among the states. At least with respect to the laws affecting investment and trust matters ...

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A Framework for Nonprofit Governance

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Jul 12, 2016

Topic: Governance and Policy Industry Knowledge

Regulation of nonprofit investment and governance practices have migrated from traditional common-law principles to codified statutory law, affecting areas of nonprofit governance not addressed in the original legislation. 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 Sarbanes-Oxley Act of 2002, and the Uniform Prudent Management of Institutional Funds Act (UPMIFA). In this newly-created “normative environment,” nonprofits can appear to be departing from best practice if they fail to comply with the standards set by these laws, even if the laws were not intended to apply directly to those situations, and boards of such institutions...

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Commonfund Roundup
06-29-16

Posted by Commonfund on Jun 29, 2016

Topic: Asset Allocation Governance and Policy Industry Knowledge Investment Strategy Market Commentary Responsible Investing Risk Management

In this month’s Commonfund Roundup, active management and risk are leading topics. Featured articles include: an interview in Institutional Investor with CEO, Catherine Keating, where she discusses the active-versus-passive debate and more; and “Active Management Fatigue and What to Do About it,” co-authored by Kristofer Kwait, Head of Investments; Jess Gaspar, Head of Asset Allocation and Research; and John Delano, Head of Analytics. Also included, the new white paper, "Striking the Balance: A Fiduciary Approach to Risk and the Investment Policy"; the latest weekly economic podcasts and more.

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Investment Management
Principle 7: Fiduciary Responsibilities

Posted by Commonfund Institute on Jun 16, 2016

Topic: Governance and Policy Industry Knowledge

In this final installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #7: Fiduciary Responsibilities. The responsibilities of those charged with oversight of a long-term investment fund such as an educational, religious or charitable endowment, foundation, hospital asset pool or pension fund differ fundamentally from those of other investment fiduciaries. It's essential to define the roles of trustees, investment officers...

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The Endowment Institute 2016: Apply today

Posted by Commonfund Institute on Jun 3, 2016

Topic: Industry Knowledge

Preeminent venue for trustees and senior investment officers of endowed institutions to sharpen their skills, acquire investment knowledge and deepen their understanding of the critical factors shaping the performance of long-term investment pools.

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Operating Charity Implements Risk-Based Investment Policy

Posted by Bill Jarvis, Executive Director, Commonfund Institute on May 31, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy Risk Management

Operating charity in the Northeast is in the process of implementing a risk-based investment policy for its $30 million endowment. The seven-member investment committee is comprised of individuals with experience at leading securities and investment firms. In drafting its IPS, the committee created a separate section entitled "Risk Tolerance"...

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Commonfund Roundup
05-31-16

Posted by Commonfund on May 31, 2016

Topic: Asset Allocation Governance and Policy Industry Knowledge Risk Management

This month's Commonfund Roundup features a webcast of Catherine Keating on the panel, "Thematic Investing and Portfolio Strategies: Betting on the Megatrends", at Milken Institute's Global Conference; Mark Anson and Ryan Driscoll's article, "Unhedged Commentary: The $3 Trillion Question," published in Institutional Investor’s Alpha; Commonfund Forum Spotlights, "The Big Picture: Integrating Investments, Finance and Development" and "Ideas for Next Gen Energy Investing"; along with the latest economic pod casts and more.

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Investment Management
Principle 6: Cost Management

Posted by Commonfund Institute on May 24, 2016

Topic: Governance and Policy Industry Knowledge

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #6: Cost Management. The costs of your investment program can quietly undercut returns; make sure you keep those costs reasonable in relation to the returns you expect to receive. The investment management function requires a deliberate commitment to cost management. Cost control essentially involves three types of activity...

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Thematic Investing:
Betting on the Megatrends

Posted by Milken Institute on May 23, 2016

Topic: Industry Knowledge Investment Strategy People

View Commonfund President and CEO Catherine Keating on a panel entitled, “Thematic Investing and Portfolio Strategies: Betting on the Megatrends” at the 19th annual Milken Institute Global Conference on May 2, 2016. The panel was moderated by Stephen Foley, U.S. Investment Correspondent of the Financial Times, and included an impressive group of asset management thought leaders...

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Deciding on an OCIO Provider: Three Factors to Consider

Posted by Bill Jarvis, Executive Director, Commonfund Institute on May 17, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy Outsourced Investing

One of the most important aspects of the success of an organization’s OCIO model is defining the respective roles and responsibilities of the institution’s board, staff, investment committee and the outsourced CIO. Investment committees should think carefully about the institution’s ultimate goals in order to articulate objectives that are understandable and clear.

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Ideas for Next Gen Energy Investing

Posted by Ethan Levine | Stuart Ames, Managing Director, Commonfund Strategic Solutions | Phil Deutch | Robert Armstrong on May 17, 2016

Topic: Asset Allocation Industry Knowledge Investment Strategy Responsible Investing

Advances in alternative energy technologies promise to reduce the world’s dependence on fossil fuels. Largely, however, they remain just that—a promise. So, where are the opportunities to invest in the evolving energy environment? At Commonfund Forum 2016, a panel discussion took on this question.

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Defining Investment Success for Endowments and Foundations

Posted by Bill Jarvis, Executive Director, Commonfund Institute on May 16, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy Risk Management

William Jarvis of the Commonfund Institute explains how the investment horizons and objectives are different for endowments and foundations as opposed to retail investors. He highlights the tax exempt status of these organizations as one of the biggest drivers of investment philosophy.

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Responsible Investing:
Terminology and Background

Posted by Bill Jarvis, Executive Director, Commonfund Institute on May 9, 2016

Topic: Industry Knowledge Responsible Investing

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 responsible investing – have become a familiar part of the vocabulary of institutional and retail investors. Just what these terms mean in practice, however, and how their practitioners’ claims can be impartially assessed, has been less clear.

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Investment Management
Principle 5: Risk Management

Posted by Commonfund Institute on May 3, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy Risk Management

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #5: Risk Management. Risk can be defined broadly as anything that can result in the objectives of the portfolio not being met. The process of risk management seeks to enable fiduciaries to make the best possible investment decisions in the face of uncertainty and to maximize the likelihood that your portfolio objectives will be achieved.

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The Big Picture: Integrating Investments, Finance and Development

Posted by Beppie Huidekoper | Lyndon Tefft | Roger Goodman | George Mateyo on May 3, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy

Most things function a lot better when all the moving parts work together—nonprofit institutions included. The synergies afforded by collaboration across organizational boundaries may be the most underutilized way to leverage your organization’s resources.

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Commonfund Roundup
05-02-16

Posted by Commonfund on May 2, 2016

Topic: Asset Allocation Governance and Policy Industry Knowledge Risk Management

This month's Commonfund Roundup features our latest Partner Page for OHSU Foundation; Commonfund Forum Spotlight, Emerging Markets: Balancing Risk and Reward; Mark Anson's latest article, "Asset Allocation with Private Equity," published in the Journal of Investment Consulting; along with the latest economic pod casts and more.

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Investment Management
Principle 4: Manager Selection

Posted by Commonfund Institute on Apr 22, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #4: Manager Selection. In the past trustees did the investing themselves or assigned the task to one or two all-purpose managers. During the last three decades, that model has been superseded by one in which fiduciaries delegate management of the portfolio to a variety of specialized investment managers, seeking those with a demonstrated record of exceeding their benchmarks.

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What is Outsourced Investment Management?

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Apr 14, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy Outsourced Investing

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 can help institutions with both large and small asset pools to address portfolio complexity and risk management challenges.

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Emerging Markets:
Balancing Risk and Reward

Posted by Dana Moreau, Chief Risk Officer, Commonfund | Geoff Colvin, Senior Editor-at-Large, Fortune Magazine | Cate Ambrose, President and Executive Director, Latin American Private Equity and Venture Capital Association | Kun Deng, Managing Director, Lazard Asset Management | Jui Tan, General Partner, BlueRun Ventures China on Apr 13, 2016

Topic: Asset Allocation Industry Knowledge Investment Strategy Risk Management

Investors poured $2 trillion into emerging economies between 2009 and 2014. Then prices for a basket of commodities fell—dragging crude oil down to levels not seen in a decade and dashing investors’ hopes at the same time. What now?

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Investment Management
Principle 3: Asset Allocation

Posted by Commonfund Institute on Apr 7, 2016

Topic: Asset Allocation Governance and Policy Industry Knowledge Investment Strategy

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #3: Asset Allocation. Arguably one of the most important investment-related decisions, asset allocation will largely determine the level of risk-adjusted return you are seeking. A key responsibility of the governing board, your strategic asset allocation policy will set the course for investing the fund for many years to come. But determining an optimal asset allocation for your institution’s portfolio involves more than numbers.

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Commonfund Roundup
03-29-16

Posted by Commonfund on Mar 29, 2016

Topic: Asset Allocation Governance and Policy Industry Knowledge Risk Management

This month's Commonfund Roundup includes the results of the Commonfund Investor Outlook Survey™, Commonfund Forum Spotlights, Sal Khan, Education Reimagined webcast, along with the article, Rethinking Risk and Diversification; the latest economic pod cast and more.

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Rethinking Risk and Diversification

Posted by Mark J.P. Anson, Chief Investment Officer, Commonfund | Catherine Keating, President and Chief Executive Officer, Commonfund | Bruce Zimmerman, CEO and CIO, University of Texas Investment Management Company and Commonfund Trustee on Mar 23, 2016

Topic: Asset Allocation Industry Knowledge Investment Strategy Risk Management

Asset allocation is still the foundation on which better risk-adjusted returns are built. But asset allocation has changed, along with all the associated tools for pursuing return and managing risk. Have you kept up?

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Investment Management
Principle 2: Payout Policy

Posted by Commonfund Institute on Mar 17, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #2: Payout Policy. Determining how much of the fund can be transferred each year to the operating budget or to designated beneficiaries while still maintaining the fund's ability to support its mission in the future.

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Education Reimagined:
Khan Academy

Posted by Commonfund on Mar 15, 2016

Topic: Industry Knowledge People

Sal Khan is the founder of the Khan Academy, a nonprofit with the mission of providing free, high-quality education to “anyone, anywhere” in the world. A former hedge fund analyst with degrees from MIT and Harvard, Khan is also the author of The One World School House, which explores the potential impact of the web as a teaching tool. With 6,000 instructional videos, 100,000 practice problems, and 10,000,000 unique users per month, Khan Academy is rethinking the world of education. In this Commonfund Forum 2016 session, Mr. Khan provides insight into the history and the evolution of Khan Academy and how we can rethink education.

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Investment Management
Principle 1: Objectives

Posted by Commonfund Institute on Mar 11, 2016

Topic: Governance and Policy Industry Knowledge Investment Strategy

The responsibilities of those charged with oversight of a long-term investment fund such as an educational, religious or charitable endowment, foundation, hospital asset pool or pension fund differ fundamentally from those of other investment fiduciaries. The differences arise primarily from the nature of these funds’ beneficiaries. In this 7-part series, we’re going to discuss key issues and essential principles of investment management. We’ll start with Principle #1: Objectives.

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Viewpoint:
Seven Years On

Posted by Commonfund Institute on Mar 11, 2016

Topic: Industry Knowledge

How long is the long term? A year ago, endowments appeared to many observers to have recovered from the losses suffered in the 2008-09 global financial crisis. Double-digit investment returns had been reported in every year except FY2012, donations had returned to their pre-crisis levels and the investment strategies of successful endowments were once again followed closely in the financial press.

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Be Heard: Participate in the next Study of Endowments

Posted by Commonfund Institute on Mar 2, 2016

Topic: Governance and Policy Industry Knowledge

Become a participant in the next NACUBO-Commonfund Study of Endowments® (NCSE). The NCSE provides the most comprehensive analysis of financial, investment and governance policies and practices. Let your voice be heard on a range of topics important to educational endowments.

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Survey Shows Uncertainty Among Institutional Investors

Posted by Commonfund on Mar 1, 2016

Topic: Governance and Policy Industry Knowledge

The results of our sixth annual Commonfund Investor Outlook Survey™ shows that institutional investor expectations have shifted from cautious optimism a year ago, to negativity for 2016.

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Sample IPS Rider for Responsible Investing

Posted by William F. Jarvis, Managing Director, Commonfund Institute on Feb 19, 2016

Topic: Industry Knowledge 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 can be inserted into the IPS of institutions that are seeking to engage in Socially Responsible Investing (SRI), Environmental, Social and Governance (ESG) investing, Impact investing or total or partial divestment of fossil fuel-related investments.

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Sample Investment Policy Statement Responsible Investing Rider

Posted by Commonfund on Feb 19, 2016

Topic: Governance and Policy Industry Knowledge Responsible Investing

Download the sample investment policy statement rider on responsible investing strategies.

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Obama Clean Power Plan Stayed by Supreme Court

Posted by William F. Jarvis, Managing Director, Commonfund Institute on Feb 12, 2016

Topic: Industry Knowledge Responsible Investing

As anticipated in our white paper, Fiduciary Duty & Environmental Responsibility: Crafting a Low Carbon Response, states and industry groups opposed to President Obama’s action to impose stringent EPA regulations on coal-fired power plants have acted quickly to file lawsuits seeking to block the measure.

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Six Key Questions To Ask OCIO Providers

Posted by Sarah Clark, Managing Director, Head of Commonfund Strategic Solutions Group on Feb 4, 2016

Topic: Governance and Policy Industry Knowledge Outsourced Investing

Today, few OCIOs that serve nonprofits are total institutional partners. Value-added OCIO providers must no longer view an institution through a purely investment-related, or even finance-related, keyhole. Many institutions require a broader and deeper approach—one that addresses wide-ranging institutional factors that extend well beyond investment management. Here are six key questions that can help you find a provider who takes a holistic approach.

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Top 5 Questions of Nonprofit Fiduciaries

Posted by Steve Snyder, Managing Director, Head of Multi-Asset Program, Commonfund | Michael Strauss, Chief Investment Strategist and Chief Economist on Jan 27, 2016

Topic: Governance and Policy Industry Knowledge Market Commentary

Investment committees and staff often question what’s next for the markets and what they should do about it. In this article we address top five concerns and questions we have heard followed by our guidance for nonprofit fiduciaries.

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2015 NACUBO-Commonfund Study of Endowments Results Released

Posted by Commonfund Institute on Jan 27, 2016

Topic: Industry Knowledge

Data gathered from 812 U.S. colleges and universities for the 2015 NACUBO-Commonfund Study of Endowments® (NCSE) show that participating institutions’ endowments returned an average of 2.4 percent (net of fees) for the 2015 fiscal year (July 1, 2014 – June 30, 2015) compared with 15.5 percent for the 2014 fiscal year. This year’s return was the lowest since the -0.3 percent reported for FY2012 and contributed to a decline in long-term 10-year average annual returns, to 6.3 percent from last year’s 7.1 percent. This year’s long-term return figure is well below the median 7.5 percent that most endowments report they need to earn in order to maintain their purchasing power after spending, inflation and investment management costs.

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Regulation Meets Policy in the Cash Markets

Posted by Alec Rapaport, Managing Director, Head of Fixed Income Strategies | Vincent Kravec, CFA, Associate Director, Fixed Income Strategies on Jan 26, 2016

Topic: Fixed Income Governance and Policy Industry Knowledge Market Commentary Operating Assets

Right now, central bank policy and money market reform are front and center in the cash markets. Are historic indicators of market stress cause for concern? Or are they reflecting the technical impacts of money market reform?

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HEPI

Posted by Commonfund on Dec 4, 2015

Topic: Governance and Policy Industry Knowledge

The annual Commonfund Higher Education Price Index (HEPI) report provides an analysis of HEPI and the cost factors...

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Understanding the Cost of Investment Management

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Oct 16, 2015

Topic: Governance and Policy Industry Knowledge

Few aspects of financial management are more important for fiduciaries than an understanding of the cost if investment management of the perpetual funds for which they have responsibility. Our aim is to guide fiduciaries as they strive to fulfill their duties under common and statutory law.

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Be Heard: Participate in the next Study of Operating Charities

Posted by Commonfund Institute on Oct 11, 2015

Topic: Governance and Policy Industry Knowledge

Become a participant in the next Operating Charities Study. The Commonfund Benchmarks Study® – Operating Charities Report provides an in-depth analysis of the investment and governance policies and practices of cultural, religious and social service organizations across the U.S. Let your voice be heard on a range a topics important to operating charities.

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5 Things to Consider When Choosing an OCIO

Posted by William F. Jarvis, Managing Director, Commonfund Institute | John Griswold, Founder and Senior Advisor, Commonfund Institute on Oct 1, 2015

Topic: Industry Knowledge Outsourced Investing

There are typically two “essential P’s” to consider when assessing potential OCIO providers — People and Processes. But once that due diligence is completed, and the evaluation process enters the final stretch (that is, the waning pages of an RFP), it comes down to two more Ps that are just as critical: Performance and Price

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Direct Hedge Fund Investing

Posted by Brett Lane, Managing Director on Sep 1, 2015

Topic: Hedge Funds Industry Knowledge

Making the shift from hedge funds of funds impacts every step in the investment process and everyone involved in investment decision-making and governance at your institution.

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Be Heard: Participate in the next Study of Healthcare Organizations

Posted by Commonfund Institute on Aug 28, 2015

Topic: Governance and Policy Industry Knowledge

Become a participant in the next Healthcare Organizations Report. The Commonfund Benchmarks Study® – Healthcare Organizations Report provides an analysis of the investment and governance policies and practices of nonprofit healthcare organizations across the U.S. Let your voice be heard on a range a topics important to healthcare organizations.

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Be Heard: Participate in the next Study of Private and Community Foundations

Posted by Commonfund Institute on Aug 21, 2015

Topic: Governance and Policy Industry Knowledge

Become a participant in the next Council on Foundations-Commonfund Study of Investment of Endowments for Private and Community Foundations (CCSF). This annual report provides an overview on investment and governance policies and practices of endowments for private and community foundations.

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Study of Foundations

Posted by Commonfund on Aug 21, 2015

Topic: Governance and Policy Industry Knowledge

The CCSF study provides an authoritative and comprehensive survey of private and community foundation investment and governance practices.

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Commonfund Roundtable | Impact Investing

Posted by Paul Von Steenburg, Managing Director, Commonfund | Roundtable Participants on Aug 17, 2015

Topic: Industry Knowledge Responsible Investing

Impact investing is showing growth around the world. According to the most recent J.P. Morgan/Global Impact Investing Network Impact Investor Survey, the number of institutional investors engaging in meaningful impact investing (committing $10 million or more to impact investments) increased by 26 percent in 2014, and the amount such investors planned to commit to impact investments was projected to increase by 19 percent to $12.7 billion in 2014 from $10.6 billion in 2013.

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Direct hedge fund investing: a framework for evaluation

Posted by Brett Lane, Managing Director on Aug 17, 2015

Topic: Hedge Funds Industry Knowledge

The trend is clear: More assets are being invested in hedge fund strategies directly through single managers while fewer assets are being channeled through hedge funds of funds.

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Using Headwinds to Gain a Foothold in emerging markets

Posted by Brijesh Jeevarathnam | Jireh Li on Aug 17, 2015

Topic: Industry Knowledge Private Capital

Just a couple years ago, emerging markets were the place to be for institutions seeking outsized portfolio gains. Economic growth was chugging along at 5 to 6 percent, compared to 2 percent in the United States. Equity markets were outshining those of the developed world. Foreign currencies were appreciating, providing a tailwind for U.S. dollar investors. These factors added up to an attractive emerging markets advantage and an incentive to invest there.

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Quant Corner – Dollar allocation ≠ risk allocation

Posted by Jess Gaspar, PhD, Managing Director, Head of Quantitative Research on Aug 17, 2015

Topic: Industry Knowledge Risk Management

DOES A 70/30 PORTFOLIO HAVE 70 PERCENT OF ITS RISK IN EQUITIES? While this question may appear to channel the old joke ”Is the little red schoolhouse red?”, the answer is clearly that a 70/30 portfolio does not have 70 percent of its risk in equity. In fact, it has nearly 100 percent of its risk in equity. This first installment of Quant Corner explains why that is the case, and why investors should resist the temptation to move away from a fully diversified portfolio.

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Redefining the risk waterfall

Posted by David Belmont, CFA, Chief Risk Officer on Aug 17, 2015

Topic: Industry Knowledge Risk Management

Mission-based organizations may get a more complete grasp on risk and its implications by approaching risk from the perspective of asset/liability management and by structuring their risk management activities around specific time frames.

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Catherine Keating on Worldwide Business with kathy ireland®

Posted by Commonfund on Jul 27, 2015

Topic: Industry Knowledge People

Catherine Keating on Worldwide Business with kathy ireland talks Commonfund history and where we are now.

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Download Your Guide to Outsourcing

Posted by Commonfund on Jul 21, 2015

Topic: Industry Knowledge Outsourced Investing

Is your Investment Committee focused on the right strategic objectives or do they get bogged down in tactical issues like reviewing investment managers? Your committee members only have a limited number of hours together during the year and maximizing their effectiveness is key. Many non-profits institutions have decided to pursue outsourcing investment management to a fiduciary partner who can dedicate the appropriate time, resources and expertise. If you are considering this approach, it’s critical to know the right questions to ask during the evaluation process.

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Manager Spotlight | York Capital Management

Posted by Commonfund on Jun 26, 2015

Topic: Hedge Funds Industry Knowledge

Manager Spotlight | York Capital Management | Masahiko "Masa" Yamaguchi Co-Portfolio Manager of Asian Opportunities and Event-Driven UCITS funds

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Commonfund’s Guide to Outsourcing

Posted by Brett Lane, Managing Director on Mar 17, 2015

Topic: Industry Knowledge Investment Strategy Outsourced Investing

Commonfund’s Guide to Outsourcing

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Principles of Investment Management for Long-Term Investors

Posted by Commonfund Institute on Mar 11, 2015

Topic: Governance and Policy Industry Knowledge

Are you a fiduciary who oversees a long-term investment fund such as an educational, religious or charitable endowment, foundation, hospital asset pool or pension fund? If so, then your role differs fundamentally from those of other investment fiduciaries. With that in mind, we have published the Principles of Investment Management for Long-Term Funds. Download this brochure today to review the key issues and essential principles that you should consider in your decision making process. In it, we discuss…

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Study of Endowments

Posted by Commonfund on Mar 2, 2015

Topic: Governance and Policy Industry Knowledge

The NACUBO-Commonfund Study of Endowments® (NCSE) provides the most comprehensive analysis of financial, investment and governance policies and practices.

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Viewpoint: Changing our Minds

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Jan 12, 2015

Topic: Governance and Policy Industry Knowledge

It is often said that we live in a world of change, but it is surprising how slowly that change can occur. Seven years after the onset of the Great Recession, many business school students are still taught that portfolio volatility is a suitable proxy for risk. In an encouraging contrast, however, this year’s NCSE data show that endowment fiduciaries at educational institutions are increasingly—and meaningfully—assimilating new practices in measuring and overseeing risk, taking steps to acknowledge and understand it in its various forms.

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Manager Spotlight | Glenview Capital Management

Posted by Larry Robbins, Founder and CEO, Glenview Capital Management on Nov 11, 2014

Topic: Equities Industry Knowledge

Manager Spotlight | Glenview Capital Management

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Commonfund Benchmarks Study – Operating Charities Report

Posted by Commonfund on Nov 10, 2014

Topic: Governance and Policy Industry Knowledge

The Commonfund Benchmarks Study–Operating Charities Report provides an analysis of investment and governance policies and practices of operating charities.

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Viewpoint: Alphabet Soup – Responsible Investing

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Oct 12, 2014

Topic: Governance and Policy Industry Knowledge Responsible Investing

Responsible investing has been used as an umbrella term that includes some investment practices of long standing and some that are relatively new arrivals. Simple, clear definitions of responsible investing practices are not difficult to find; here are the ones...

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Form follows function in multi-asset investing

Posted by Steve Snyder, Managing Director, Head of Multi-Asset Program, Commonfund on Sep 17, 2014

Topic: Asset Allocation Industry Knowledge Outsourced Investing

Interest in multi-asset investing is growing and the inflows confirm it: Institutional assets committed to multi-asset investing are reported to have increased to $773 billion at year-end 2013, up from $442 billion at year-end 2010, while the second quarter of 2014 represented the 11th consecutive quarter of fund flows into the strategy. The trend isn’t confined to the U.S., either, as industry data indicate that in Europe some €62.5 billion was committed to multi-asset funds in the first six months of 2014.

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Commonfund Benchmarks Study – Healthcare Report

Posted by Commonfund on Aug 28, 2014

Topic: Governance and Policy Industry Knowledge

The Commonfund Benchmarks Study–Healthcare Report provides an analysis of investment & governance policies & practices of healthcare organizations.

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Working Capital: Challenge and Opportunity

Posted by Delanie Moler | Tom LeMarbe | Jon Speare | Beppie Huidekoper on Aug 17, 2014

Topic: Industry Knowledge Operating Assets

University campuses have begun to think differently about operating asset management, better ways to balance liquidity, risk and return.

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Greenhouse effect

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Aug 17, 2014

Topic: Industry Knowledge Risk Management

In the last five years, as world markets have recovered from the global financial crisis, institutional portfolio returns have generally been strong. While many factors have played a part in this scenario, historically low interest rates and accommodative monetary policies on the part of the Federal Reserve and the European Central Bank—an artificial environment like that of a greenhouse—are among the main causes for the high equity market returns of the last few years.

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Smart money, crowded trades?

Posted by Kristofer Kwait, Managing Director, Head of Hedge Fund Strategies | John Delano, Director, Hedge Fund Strategies Group, Commonfund on Aug 17, 2014

Topic: Hedge Funds Industry Knowledge

Approaches to stock selection vary widely across the hedge fund universe, even among managers practicing the same strategy. Valuation, potential catalysts, time horizons and technical factors based on price history all influence decisions to own a stock, both in terms of names and position sizing and hedging. A name that is attractive to one manager may leave another unmoved, or escape consideration altogether.

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Global private equity: what and why

Posted by Mark Hoeing, Managing Director | Miriam Schmitter, Managing Director, Commonfund Capital on Aug 17, 2014

Topic: Asset Allocation Industry Knowledge Private Capital

An article in the previous issue of Insight sought to discern the difference between perception and reality in private equity investing generally, and included a companion article focused on European private equity specifically. Now, we take a deeper look at international private equity, with an emphasis on Europe as well as Japan and Australia. Once again, there is a perception gap that may lead long-term institutional investors seeking to diversify their portfolio both by asset class/strategy and geography to overlook what we believe are compelling opportunities outside the U.S. Herewith, the what and why of international private equity.

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Of apples, oranges and onions: assessing OCIO performance and fees

Posted by William F. Jarvis, Managing Director, Commonfund Institute | John Griswold, Founder and Senior Advisor, Commonfund Institute on Aug 17, 2014

Topic: Industry Knowledge Outsourced Investing

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. When assessing potential OCIO providers, institutions typically first cover two “essential Ps”—the providers’ People and Processes.

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Viewpoint: Looking Modern and Sharpe

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Jul 7, 2014

Topic: Governance and Policy Industry Knowledge Risk Management

Every fiduciary knows that risk-taking is an unavoidable part of investing. But how can fiduciaries think usefully about risk in the context of their role as guardians of their institutions’ funds? This question is particularly urgent in the current financial and economic environment, which since early 2009 has been strongly influenced by the policies of the leading central banks, notably the Federal Reserve. The banks’ policies of keeping interest rates extremely low and providing liquidity to the market have supported a broad resurgence in public equity prices in the U.S. and Japan. Although the recovery has seen some pauses and retrenchments as each market has reacted in its own way to the central banks’ policies, the overall direction of prices has been strongly upward.

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Assessing Your Board’s Risk Tolerance

Posted by Bill Jarvis, Executive Director, Commonfund Institute | John Griswold, Founder and Senior Advisor, Commonfund Institute on Jun 2, 2014

Topic: Governance and Policy Industry Knowledge Investment Strategy Risk Management

In the wake of the financial crisis, trustees of many endowed nonprofit institutions realized that their portfolio was riskier than they thought and their own ability to tolerate loss wasn’t as strong as they imagined. What can board and investment committee members do to improve their ability to assess their risk tolerance?

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ESG – What is it?

Posted by Stuart Ames, Managing Director, Commonfund Strategic Solutions | David Belmont, CFA, Chief Risk Officer on May 1, 2014

Topic: Governance and Policy Industry Knowledge Responsible Investing

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, potentially, its long-term investment returns.

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More hedge fund investors are going direct. should your institution?

Posted by Nick De Monico, Former interim CIO, Commonfund | Brett Lane, Managing Director on Apr 13, 2014

Topic: Hedge Funds Industry Knowledge

Direct, fund of fund or a combination: more options for more institutions.

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Commonfund Roundtable | Evolving challenges in nonprofit governance

Posted by Myra Drucker, Chair of the Board, TrustedPeer Inc. and former chair of the Commonfund Board of Trustees | John Griswold, Founder and Senior Advisor, Commonfund Institute | Cindy Lott, Senior Counsel to the National State Attorneys General Program at Columbia Law School | Jeffrey Tenenbaum, Partner and Chair of the nonprofit organization practice Venable, LLP on Apr 13, 2014

Topic: Governance and Policy Industry Knowledge

Commonfund recently convened an expert panel moderated by MYRA DRUCKER (standing, left), Chair of the Board, TrustedPeer Inc. and former chair of the Commonfund Board of Trustees. The roundtable examined recent developments in the ongoing evolution of nonprofit governance. Roundtable participants were (seated, left to right): JOHN GRISWOLD, Executive Director, Commonfund Institute; CINDY LOTT, Senior Counsel to the National State Attorneys General Program at Columbia Law School; and JEFFREY TENENBAUM, Partner and Chair of the nonprofit organization practice Venable, LLP, Washington, D.C. Highlights of their exchange follow.

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Risk: the fuel that generates portfolio returns

Posted by David Belmont, CFA, Chief Risk Officer on Apr 12, 2014

Topic: Industry Knowledge Risk Management

In a broad sense, how should nonprofit institutional investors think about investment risk and risk management? Just about every nonprofit will answer that question somewhat differently; what is a considerable risk for one organization may be less of a concern for another. Large nonprofits may have a chief risk officer; at smaller and mid-sized organizations, investment risk management is the responsibility of the board, investment committee and senior staff members. For organizations whose mission is investment management, risk and risk management take on a wholly different complexion and level of complexity. Still, there are commonalities that may help even the smallest of institutional investors conceptualize an approach to risk management that is workable and effective.

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ESG: sharpening the point

Posted by Stuart Ames, Managing Director, Commonfund Strategic Solutions | Lauren Caplan, Assistant General Counsel, Commonfund | David Belmont, CFA, Chief Risk Officer on Apr 12, 2014

Topic: Industry Knowledge Responsible Investing

In general, ESG is used to describe a group of characteristics that can have a material impact on the long-term success of a company and, potentially, investment returns. Examples of the “E” in ESG criteria include environmental factors, such as energy consumption and greenhouse gas emissions; examples of the “S” include social factors, such as supply-chain risk management, corporate citizenship, gender and racial diversity, and employee productivity; examples of the “G” include governance factors, such as independent board leadership and CEO compensation.

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Viewpoint: Looking Modern and Sharpe – Study of Endowments

Posted by Bill Jarvis, Executive Director, Commonfund Institute on Jan 12, 2014

Topic: Governance and Policy Industry Knowledge Risk Management

Every fiduciary knows that risk-taking is an unavoidable part of investing. But how can fiduciaries think usefully about risk in the context of their role as guardians of their institutions’ funds? This question is particularly urgent in the current financial and economic environment, which since early 2009 has been strongly influenced by the policies of the leading central banks, notably the Federal Reserve. The banks’ policies of keeping interest rates extremely low and providing liquidity to the market have supported a broad resurgence in public equity prices in the U.S. and Japan. Although the recovery has seen some pauses and retrenchments as each market has reacted in its own way to the central banks’ policies, the overall direction of prices has been strongly upward.

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Subscribe & Manage Your Frequency to Insights Blog

Posted by Commonfund on Jan 5, 2014

Topic: Asset Allocation Equities Fixed Income Governance and Policy Hedge Funds Industry Knowledge Market Commentary Operating Assets Outsourced Investing Partners People Private Capital Quant Strategies Responsible Investing Risk Management

Subscribe to the Insights Blog from Commonfund to stay informed with the latest information for nonprofit investors and the public sector.

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Viewpoint: A Different Kind of Climate Change

Posted by Commonfund Institute on Nov 12, 2013

Topic: Industry Knowledge Investment Strategy

While operating charities entered the financial crisis with asset allocations that reflected their priorities and preferences at the time — and that were, in many respects, remarkably similar across the three categories of institution — the ensuing seven-year period has seen continual evolution and differentiation, with the result that these organizations, while they have moved in the same general direction of increased diversification, have done so in ways that reflect their own institutional preferences and priorities.

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What, me? Illiquid?

Posted by Tim Yates, Managing Director, Commonfund | Paul Von Steenburg, Managing Director, Commonfund | Kent Scott, Managing Director, Commonfund on Oct 1, 2013

Topic: Industry Knowledge Private Capital

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 since the depths of that crisis, illiquidity remains an important topic with lingering concerns about locking up capital for 10-plus years.

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10 Point Checklist to Get Governance Right

Posted by Bill Jarvis, Executive Director, Commonfund Institute | Tom Hyatt, Partner, Dentons US LLP, Washington, DC on Oct 1, 2013

Topic: Governance and Policy Industry Knowledge

While governance has many facets that can make it daunting to navigate, trustees may want to start with this 10-point checklist.

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6 keys to choosing the right outsourced CIO

Posted by Sarah Clark, Managing Director, Head of Commonfund Strategic Solutions Group on Aug 12, 2013

Topic: Industry Knowledge Investment Strategy Outsourced Investing

Not long ago, the definition and scope of an “Outsourced CIO” (or OCIO) was narrowly defined. It generally meant investment management—a traditional consulting model in which the process of interviewing managers was delegated to an outside provider. Over time, however, as institutions’ internal staffs have been reduced and stretched, the definition of the model has expanded and evolved in kind. While OCIO was once regarded as merely an investment advisory function, it now can be about a total partnership that delves into deeper issues than an institution’s investment portfolio.

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‘What, me? Illiquid?’

Posted by Tim Yates, Managing Director, Commonfund | Paul Von Steenburg, Managing Director, Commonfund | Kent Scott, Managing Director, Commonfund on Apr 12, 2013

Topic: Industry Knowledge Private Capital

Although it has been five years since the collapse of Lehman Brothers—an event that transformed a bad recession into a global financial crisis—the scars of that traumatic episode remain etched in the psyche of many institutional investors. We have new worst-case scenarios in our risk models and a greater appreciation for so-called “black-swan” or “left-tail” events. Nowhere is this lingering fear more palpable than in the consideration of illiquid investments as investors continue to think through the amount of capital to lock up in “illiquid” strategies. Because of this recent history and uncertainty about the future, we often hear investors ask, “Why should I lock up capital for 10-plus years? And if I should, how much?”

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Top of The Charts

Posted by Commonfund on Apr 12, 2013

Topic: Industry Knowledge Outsourced Investing

Investment complexity—as measured by ever-increasing allocations to alternative investment strategies—has risen significantly in recent years. But, nonprofits have not increased staff resources commensurately. As allocations to alternatives have doubled, or even tripled, among a representative sample of educational endowments and foundations, staffing has increased by about one-half a full-time equivalent (FTE) over several years. Two studies show this.

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