Industry Knowledge

Viewpoint: Responsible Investing – Read All About It

Posted by Commonfund Institute on Aug 10, 2018

Topic: Industry Knowledge | Investment Strategy | Responsible Investing

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 area of inquiry showed as much year-over-year change or as much change over the past few Studies; to be clear, the changes would not be considered dramatic, but they are consistent and the trend line is easily discernible.

Read now

2017 CCSF Study Results Released

Posted by Commonfund Institute on Aug 9, 2018

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered in the 2017 Council on Foundations–Commonfund Study of Investment of Endowments for Private and Community Foundations® (CCSF) show that participating private and community foundations realized significantly higher investment returns for the 2017 fiscal year (January 1 – December 31, 2017) than they did in FY2016. Participating private foundations reported an average FY2017 return of 15.0 percent compared with 6.4 percent in FY2016. Participating community foundations reported an average return of 15.1 percent for FY2017, up from 7.3 percent in FY2016.

Read now

Wage Inflation: Is it Different This Time?

Posted by Ryan Driscoll, Kristofer Kwait on Jul 13, 2018

Topic: Industry Knowledge | Market Commentary

The Federal Reserve Governors have been waiting patiently for a meaningful jump in inflation to validate the removal of historically low interest rates that laid the foundation for the economic recovery since the financial crisis. And . . . while The Fed continues to wait . . .

Read now

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

Posted by Cathleen M. Rittereiser on Jul 12, 2018

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

Three days after becoming Executive Director of the Commonfund Institute, I found myself giving welcoming remarks at our annual program. The agenda focused on the key responsibilities and decisions fiduciaries make, starting with policy decisions and leading into execution. The most important lessons I learned ...

Read now

Inaugural Corporate Responsibility Report and 2018 Mid-Year Letter

Posted by Mark J.P. Anson, Commonfund on Jul 12, 2018

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Responsible Investing

We are pleased to share with you our inaugural Corporate Responsibility Report. Since our founding in 1971, Commonfund has pursued a singular mission – to enhance the financial resources of our clients by delivering exceptional performance, service and insight. Beyond our focus on investment excellence . . .

Read now

Equity Portfolio Construction – Through a Risk Factor Lens

Posted by David Scarozza on Jun 28, 2018

Topic: Equities | Industry Knowledge | Investment Strategy | Market Commentary | Risk Management

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 and measured “risk away from the benchmark” by allocating to a variety of managers who employ active risk strategies...

Read now

What are the Differences Between SRI and ESG?

Posted by Commonfund Institute on Jun 19, 2018

Topic: Industry Knowledge | Investment Strategy | Responsible Investing

There are many terms referring in some way to practices related to responsible investing: socially responsible investing; mission-related investing; impact investing; integrated reporting; and investing according to environmental, social and governance principles. These terms are often grouped under the same category of responsible investing, but this generalization is misleading..

Read now

Strong Signals Support the Fed’s Path Forward

Posted by Ryan Driscoll, Kristofer Kwait on Jun 15, 2018

Topic: Industry Knowledge | Market Commentary

Ultimately, the decision to increase rates was unanimous as the vote was 8-0. Federal Reserve officials raised interest rates for the second time this year and upgraded their forecast to four total increases in 2018, as unemployment fell and inflation exceeded their targets faster than previously projected.

Read now

Bonds: Unwanted and Unloved but not Unnecessary

Posted by Timothy T. Yates, Jr., Mark J.P. Anson on May 30, 2018

Topic: Industry Knowledge | Investment Strategy | Market Commentary

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 be hard to believe, but we have been in a secular interest rate decline for over thirty years...

Read now

Diversity and Emerging Managers

Posted by Commonfund Institute on May 21, 2018

Topic: Asset Allocation | Industry Knowledge | Investment Strategy | Responsible Investing

The benefits of diversity are widely recognized in the work place and among educational institutions and other nonprofits. Yet, the concept of investment management firms that are minority owned and operated lags, partly because of the challenge of attracting investors’ capital . . .

Read now

Are You Eligible to Attend?

Posted by Commonfund Institute on May 15, 2018

Topic: Industry Knowledge

Commonfund Institute is an intensive week-long, classroom-based program held exclusively for senior representatives of qualified institutional investors. (formerly called the Endowment Institute)

Read now

Inflation Expectations are Rising. How Can Investors Protect Portfolios?

Posted by Ivo C. Nenin, Kristofer Kwait on May 14, 2018

Topic: Asset Allocation | Industry Knowledge | Investment Strategy | Market Commentary | Real Assets

In March, capital markets entered their tenth year of post-crisis recovery. For diversified portfolios, these have been some of the most profitable times, characterized by strong returns, positive correlations between equities and bonds and robust illiquidity premiums from private programs . . .

Read now

After the G-Zero: Overcoming Fragmentation (login required)

Posted by Commonfund on May 7, 2018

Topic: Asset Allocation | Industry Knowledge | Investment Strategy | Market Commentary

In this Commonfund Forum 2018 general session, featured speaker Ian Bremmer shares his insights and views to help us understand the broader global issues we need to consider as we formulate policy portfolios for the years ahead.

Read now

ESG Investing Becomes Mainstream

Posted by Commonfund Institute on May 4, 2018

Topic: Asset Allocation | Industry Knowledge | Investment Strategy | Responsible Investing

Can a sustainability strategy be tied to better financial outcomes? The subject of ESG, or investing in accord with environmental, social and governance principles, arose in several sessions at Commonfund Forum 2018. One session, in particular, was devoted to the ongoing evolution of responsible investing, with a focus on ESG.

Read now

Trade Wars and the Land of the Rising Sun

Posted by Mark J.P. Anson on Apr 26, 2018

Topic: Industry Knowledge | Market Commentary

The trade wars began with the United States and China but have now expanded to Japan as well. With Russia, the U.S., and the U.K. all looking inwardly, emerging market nations need another superpower to turn to for foreign direct investment, infrastructure, and other economic support.

Read now

Private Capital: Key to Unlocking Growth in Emerging Markets

Posted by Commonfund Institute on Apr 25, 2018

Topic: Industry Knowledge | Investment Strategy | Market Commentary | Private Capital

After a turbulent period, emerging markets have delivered double-digit returns in recent years. Private investments in emerging markets offer a way to diversify beyond the public markets and, in general, have also been a source of strong returns...

Read now

Investing in Diversity

Posted by Caroline Greer on Apr 3, 2018

Topic: Industry Knowledge | Investment Strategy | Responsible Investing

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 enough. We also dig deeply into the sources of those returns to understand the underlying factors driving the strategy. Through our construction process we look to combine uncorrelated sources of return, thereby reducing overall portfolio risk. This search for uncorrelated alpha sources requires finding managers that are different from the crowd.

Read now

10 Key Takeaways from
Commonfund Forum 2018

Posted by Commonfund Institute on Apr 2, 2018

Topic: Industry Knowledge | Investment Strategy | Market Commentary

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 and the United Kingdom in a 2.5 day conference. Sessions explored cyclical and tactical investment trends and, importantly, strategies to help institutions support their missions. More than 60 experts from investment firms, academia, public policy and think tanks convened in general sessions, major addresses and breakout sessions. Here are 10 key takeaways from Commonfund Forum 2018.

Read now

Forum 2018 Attendee Stats [Infographic]

Posted by Commonfund Institute on Mar 28, 2018

Topic: Industry Knowledge

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 opportunities that can help support the missions of their institutions.

Read now

Survey Finds Investors Remain Cautiously Optimistic

Posted by Commonfund on Mar 27, 2018

Topic: Asset Allocation | Industry Knowledge

In a Commonfund 2018 investor survey, nonprofit investors believe trade wars and protectionism pose greatest threat to the global economy. Endowments and Foundations remain cautiously optimistic on achieving long-term target returns.

Read now

Evolving Asset Allocation and Policy Portfolios

Posted by Commonfund on Mar 27, 2018

Topic: Asset Allocation | Equities | Industry Knowledge | Investment Strategy

In this Forum 2018 general session, Commonfund experts share research findings and techniques we employ to help investors understand not just the characteristics of their portfolio in isolation but also the broader considerations and pressures that should shape risk, drawdown and recovery expectations over the long haul.

Read now

Building Resiliency

Posted by Commonfund on Mar 23, 2018

Topic: Asset Allocation | Equities | Industry Knowledge | Investment Strategy | Market Commentary

In this keynote presentation from Commonfund Forum 2018, CEO Catherine Keating shares insights into the investment philosophy and practices that may enable institutions to build resiliency into their portfolios.

Read now

The Fed Stays the Course

Posted by Ryan Driscoll, Kristofer Kwait on Mar 22, 2018

Topic: Industry Knowledge | Market Commentary

An increase in the Fed Funds rate at the March FOMC meeting was a forgone conclusion. The biggest unknown was whether the new chairman of the Federal Reserve, Jay Powell, would continue the cautious approach of his predecessor, Janet Yellen, or choose a slightly more aggressive stance in removing the accommodative policies of the last ten years.

Read now

Manager Spotlight: Ariel Investments

Posted by Commonfund on Mar 22, 2018

Topic: Industry Knowledge | Investment Strategy | Partners | People

Commonfund Chief Executive Officer, Catherine Keating, interviews Mellody Hobson, President of Ariel Investments. This wide-ranging discussion covers topics such as Ariel’s investment philosophy and process, their current market outlook, as well as Mellody’s thoughts on diversity and her career experiences.

Read now

5 Private Capital Concerns

Posted by Ralph P. Money, Peter Burns on Mar 9, 2018

Topic: Industry Knowledge | Investment Strategy | Private Capital

At the end of the year we sent out a short survey to learn more about investors’ headline concerns about the private capital markets today. Investors also shared their expectations about returns and where they see their allocations to various private strategies trending.

Read now

2017 NCSE Key Findings [Infographic]

Posted by Commonfund Institute on Mar 6, 2018

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

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 NACUBO-Commonfund Study of Endowments. This annual report studies, on average, over 800 educational institutions that include U.S. educational institutions, private colleges and university endowments, public educational endowments, institution-related foundations (IRFs) and combined public endowment/foundations.

Read now

Baring Their Teeth –
FAANGs Take a Bite Out of Equities

Posted by Mark J.P. Anson, Mark Bennett on Mar 2, 2018

Topic: Equities | Industry Knowledge | Investment Strategy

Narrow markets are not uncommon to equity investors. They tend to manifest themselves during the best of times, as bull markets lengthen and thematic elements of investing gain popularity. Prior narrow market environments existed in the late 1990s (the historic tech bubble that many remember) and also in 2007, prior to the global financial crisis. The most recent narrow market has been dominated by the headlines of FAANGs — Facebook, Amazon.com, Apple, Netflix and Alphabet, formerly known as Google. These five business models are disrupting all sorts of industries, and with it, their stock prices have soared.

Read now

Viewpoint:
Being Objective

Posted by Commonfund Institute on Feb 22, 2018

Topic: Governance and Policy | Industry Knowledge

Every year, the NACUBO-Commonfund Study of Endowments® (NCSE) reports new data—on investment returns, asset allocation, risk management, donations and gifts, and much more. But some data points are relatively static. In this Viewpoint we will dive deeper into long-term return objectives and the investment policies that support the objectives of the endowment.

Read now

Keating on Bloomberg TV

Posted by Commonfund on Feb 21, 2018

Topic: Industry Knowledge

Catherine Keating, Commonfund CEO, discusses the U.S. markets. She speaks with Julia Chatterley and Lisa Abramowicz on "Bloomberg Markets." (Source: Bloomberg)

Read now

Returning to the “Old Normal”

Posted by Ryan Driscoll, Michael Strauss on Feb 15, 2018

Topic: Equities | Industry Knowledge | Market Commentary

Investors took solace in the lack of stock market volatility in 2017. In reality, that may have been more of an anomaly than the current turbulence equity investors are experiencing. Volatility spikes in the capital markets are not unusual.

Read now

A Gap In Reality

Posted by Timothy T. Yates, Jr. on Feb 13, 2018

Topic: Asset Allocation | Industry Knowledge | Investment Strategy | Outsourced Investing

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 question frequently asked at many committee meetings and while it is certainly important to understand what peers are doing, the most recent 1-year return may be the most overrated number in the 127 page study.

Read now

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

Posted by Commonfund Institute on Jan 25, 2018

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered from 809 U.S. colleges and universities for the 2017 NACUBO-Commonfund Study of Endowments® (NCSE) show that participating institutions’ endowments returned an average of 12.2 percent (net of fees) for the 2017 fiscal year (July 1, 2016 – June 30, 2017) compared with -1.9 percent for the 2016 fiscal year and 2.4 percent for fiscal 2015. Despite this year’s improved return, the mission-critical 10-year average annual return fell to 4.6 percent from last year’s 5.0 percent, as FY2007’s strong 17.2 percent return dropped out of the trailing 10-year average.

Read now

2017 NACUBO-Commonfund Study of Endowments Results Released

Posted by Commonfund Institute on Jan 25, 2018

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered from 809 U.S. colleges and universities for the 2017 NACUBO-Commonfund Study of Endowments® (NCSE) show that participating institutions’ endowments returned an average of 12.2 percent (net of fees) for the 2017 fiscal year (July 1, 2016 – June 30, 2017) compared with -1.9 percent for the 2016 fiscal year and 2.4 percent for fiscal 2015. Despite this year’s improved return, the mission-critical 10-year average annual return fell to 4.6 percent from last year’s 5.0 percent, as FY2007’s strong 17.2 percent return dropped out of the trailing 10-year average.

Read now

When Leaks Turn into Floods:
Challenges Facing Higher Education

Posted by Timothy T. Yates, Jr. on Jan 19, 2018

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Operating Assets | Outsourced Investing | Risk Management

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...

Read now

Governance Best Practices: How Does Your Board Measure Up?

Posted by Commonfund Institute on Jan 11, 2018

Topic: Governance and Policy | Industry Knowledge

Since our founding in 1971, a core element of the Commonfund mission has been to provide insights on a broad range of governance, policy and investment challenges. An engaged governing board is important in all environments – but perhaps no more so than today. Markets are at new highs, yet there remains much uncertainty – from the inevitable market correction to disruption of many nonprofit operating models to the impact of recently enacted tax law changes. As we start 2018, Commonfund Institute convened a panel of thought leaders to discuss current practices in nonprofit governance and offer ways for boards to bring best practices to their processes and deliberations. The discussion was moderated by John S. Griswold, Founding Director of the Institute. The three panelists were: Thomas K. Hyatt, partner in the Washington office of Dentons US LLPand co-chair of the firm’s U.S. Nonprofit Entities Practice. He is a Senior Fellow for Public Policy at the Association of Governing Boards of Universities and Colleges (AGB) and was recognized as Outstanding Nonprofit Lawyer of the Year for 2017 by the American Bar Association. Robert B. Litterman, PhD., Chair of the Risk Committee and a founding partner of Kepos Capital, a New York City-based systematic global macro investment firm. In a 23-year career with Goldman Sachs he headed the firm’s risk management function and co-developed the Black-Litterman Global Asset Allocation Model, a mathematical model for portfolio allocation. He is Chair of the Board of Trustees of Commonfund, and serves on other boards, including the World Wildlife Fund and the Robert Wood Johnson Foundation. David Nygren, PhD., founder of Nygren Consulting and previously founding Senior Partner of the Corporate Governance Consulting Group at Mercer Delta Consulting. Formerly, he was Executive Vice President of DePaul University and has held teaching and research appointments at Harvard, Yale and Boston University. He has served on or chaired the boards of numerous organizations in education, health care and the arts.

Read now

Tax Reform:
CPI Plus More

Posted by Sharad Samy, Keith Luke, Catherine Keating on Dec 19, 2017

Topic: Governance and Policy | Industry Knowledge

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 nonprofit and public sector investors we serve. We focused on the Tax Act’s provisions, but also its wider goal of stimulating economic growth. We also attempted to discern the implicit preferences and philosophy of this first piece of major legislation from our nation’s 115th Congress, which is expected to be passed later this week, and its implications for public policy in the years ahead.

Read now

Year-End Update and 2018 Outlook | Rational Resiliency

Posted by Catherine Keating on Dec 14, 2017

Topic: Asset Allocation | Equities | Fixed Income | Governance and Policy | Industry Knowledge | Investment Strategy

As we come to the end of 2017 and look forward to 2018, we are approaching the tenth year of the post-crisis recovery. With synchronized global growth for the first time in a decade, equity markets near all-time highs, and a year of strong double-digit portfolio returns, investors should be feeling exuberant. And yet we find the exuberance of most institutions with whom we work tempered by concerns about the future.

Read now

2017 HEPI: Highest Increase Since 2008

Posted by Commonfund on Dec 12, 2017

Topic: Governance and Policy | Industry Knowledge | Operating Assets

This week Commonfund released the 2017 update to the Higher Education Price Index® (HEPI). It includes three important changes that investors should take note of: (1) the 2017 HEPI inflation rate was 3.7 percent - the highest increase since 2008, (2) seven of the eight HEPI components showed positive increases, with just Supplies and Materials registering a slight decrease of 0.5 percent as compared to the prior year and (3) fringe Benefits increased 5.9 percent, the most since before the Great Financial Crisis.

Read now

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

Posted by Sharad Samy, Keith Luke, Catherine Keating on Dec 4, 2017

Topic: Governance and Policy | Industry Knowledge

As we approach the end of calendar year 2017, the passage of significant tax reform legislation – while far from certain – seems increasingly more likely. The Senate and the House versions, which vary in some substantive ways, must be reconciled before the President can sign a bill into law. What is certain is that if passed, the tax bill will have a broad impact for most filers – corporations, individuals and tax-exempt institutions, including colleges and universities, private foundations and public charities.

Read now

What’s the Difference? Time-Weighted Return vs. Internal Rate of Return

Posted by Commonfund on Oct 27, 2017

Topic: Industry Knowledge | Investment Strategy

Investors often ask about the difference between time-weighted return (“TWR”) and internal rates of return (“IRR”). In general, TWR is used by the investment industry to measure the performance of funds investing in publicly traded securities. By contrast, IRR is normally used to gauge the return of funds that invest in illiquid, non-marketable assets—such as buyout, venture or real estate funds. This article will explain why public and private investment returns are reported differently and how the calculation methodologies differ.

Read now

Top Ten Insights for Foundation Investors in a Mature Market

Posted by Catherine Keating on Oct 17, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Responsible Investing

Last week I had the honor of moderating a panel at the 2017 Council on Foundations Endowments & Finance Summit. In the session, “Foundation Investing in Mature Markets: Challenges and Rewards,” I was joined by three esteemed colleagues, representing foundations with over $3 billion in endowed assets and close to three centuries of combined history. My colleagues: Mary Greenebaum, CIO, New York Community Trust; Sherry P. Magill, PhD., President of the Jessie Ball duPont Fund; and Jeremy Tennenbaum, CFA, Chief Financial Officer of the Altman Foundation. Each of these institutions is a pillar of its community, supporting programs that enrich quality of life and . . .

Read now

On Complacency | Why Risk Management Always Matters

Posted by Dana Moreau, Brian Rondeau on Sep 14, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Risk Management

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 always properly planned for. We are in the midst of one of the longest economic expansions in U.S. history, 98 months and counting, trailing only the 120 month and 106 month expansions of the 1990s and 1960s, respectively. There have been bumps along the way, but this has been an extended benign period for risk in the capital markets.

Read now

Never Enough: Challenges Facing Private Colleges

Posted by Commonfund Institute on Sep 14, 2017

Topic: Governance and Policy | Industry Knowledge | Operating Assets

The traditional small, private, liberal arts college model of higher education has been under stress for some time. Viewed as economic entities, these institutions — like their larger peers, the research universities — rely on three main sources of income: tuition, fees and grants, and distributions from their endowments. Unlike research universities, however, small liberal arts colleges are facing a unique combination of headwinds that deeply challenge their operational model and may, in many cases, pose threats to their continued existence. In this article, we describe those challenges and outline some steps that governing boards and administrations may have to take in order to ensure the survival of their institutions.

Read now

A Primer on Outsourced Investment Management

Posted by Commonfund Institute on Aug 31, 2017

Topic: Industry Knowledge | Investment Strategy | Outsourced Investing

Once seen primarily as a solution for small institutions with limited resources, outsourced investment management is now widespread, with a broad range of long-term investors – including those with more substantial investable asset pools – turning to the outsourced chief investment officer model. Properly implemented, outsourcing can help institutions to address portfolio complexity and risk management challenges, speed decision-making and contend with an increasingly rigorous regulatory environment, while enabling trustees to focus on improving institutional governance.

Read now

Hedge Fund Land:
An Expensive Amusement Park?

Posted by Mark J.P. Anson on Aug 16, 2017

Topic: Asset Allocation | Hedge Funds | Industry Knowledge | Investment Strategy

In a series of articles, we have addressed two recent investment “fatigues” experienced by institutional investors: Active vs. Passive; and Global (ACWI) vs. US benchmarks. In this article, we tackle the third and last “fatigue”— Hedge Funds. Hedge funds have come under extreme criticism lately for their expensive fee structure, lack of performance, and too much “beta” wrapped up in an “alpha” fee structure. It appears that hedge funds are run more for the amusement of the hedge fund manager and less for the benefit of the hedge fund’s clients. These are all legitimate concerns but we still believe that there is value to be found in Hedge Fund Land.

Read now

2016 CCSF Key Findings [Infographic]

Posted by Commonfund Institute on Aug 14, 2017

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

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 percent for the same period. In this infographic, we report the top findings from the 2016 Council on Foundations-Commonfund Study of Foundations. This annual report studies, on average, over 200 private and community foundations that represent over $100 billion in assets.

Read now

Viewpoint: Increased Responsibility

Posted by Commonfund Institute on Aug 8, 2017

Topic: Governance and Policy | Industry Knowledge | Responsible Investing

In recent years, growing attention has been paid to the use by endowed institutions of so-called responsible investing practices. The three main practices — environmental, social and governance (ESG) investing; socially responsible investing (SRI); and impact investing (also known as mission-related investing or MRI) — are defined in this article.

Read now

2016 CCSF Study Results Released

Posted by Commonfund Institute on Jul 14, 2017

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered in the 2016 Council on Foundations–Commonfund Study of Investment of Endowments for Private and Community Foundations® (CCSF) show that participating private foundations reported an average return of 6.4 percent for the 2016 fiscal year (January 1 – December 31, 2016) while participating community foundations reported an average return of 7.3 percent for the same period.

Read now

Commonfund Among Top 5 Most Trusted Institutional Asset Managers

Posted by Commonfund on Jun 9, 2017

Topic: Governance and Policy | Industry Knowledge | Responsible Investing

Commonfund, a prominent asset manager for endowments, foundations and public pension investors, announced today that the firm has been ranked among the top 5 most trusted institutional asset managers for nonprofits according to findings from the 2017 US Institutional Investor Brandscape®, a Cogent Reports™ study released by Market Strategies International.

Read now

Building Diversified Endowment Portfolios

Posted by Commonfund on Jun 7, 2017

Topic: Industry Knowledge

Catherine Keating, Commonfund Chief Executive Officer, speaks with Bloomberg on building diversified endowment portfolios in today's environment.

Read now

WannaCry? WannaRun, WannaHide!
Managing Cybersecurity Risk

Posted by David Young, Brian Rondeau on Jun 7, 2017

Topic: Industry Knowledge | Risk Management

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 these events with measures of volatility remaining muted. There are always additional risks lurking and the WannaCry ransomware attack highlighted one of the largest.

Read now

Implications of New York’s Excelsior Scholarship Program

Posted by Commonfund Institute on Jun 6, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

While opening opportunity to many New York families, the recently enacted Excelsior Scholarship Program will likely stress the financial resources of small private colleges and universities in New York State, particularly those with a high percentage of state resident students, modest endowments and high tuition discount rates. With revenues from tuitions facing pressure, the importance of endowment in support of operating budgets and scholarships will increase.

Read now

Flexing your Global Portfolio can lead to ACWI Fatigue

Posted by Mark J.P. Anson on Jun 6, 2017

Topic: Asset Allocation | Industry Knowledge | Investment Strategy

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 (ACWI) vs. the Standard & Poor’s 500 (S&P 500) – or any U.S. equity benchmark, for that matter – for the last several years has been building up to a painful point. This pain threshold has pushed investors to the limits of their global endurance resulting in what we call “ACWI Fatigue.” ACWI Fatigue is most acute with institutional investors who use the MSCI ACWI as their equity benchmark and, as a result, have a globally-oriented equity portfolio.

Read now

Active Fee Management: Notes from the Front Lines

Posted by Mark Bennett on May 30, 2017

Topic: Industry Knowledge | Investment Strategy

Few topics get investor’s 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 important topic, as they directly relate to your investment performance...

Read now

The Fed Still on “Autopilot”

Posted by Ryan Driscoll, Michael Strauss on May 26, 2017

Topic: Industry Knowledge | Investment Strategy | Market Commentary

The latest FOMC minutes show that the Fed believes that the growth and inflation slowdown in 2017:Q1 will prove to be transitory...

Read now

Catherine Keating Delivers UVA Law’s 2017 Commencement Address

Posted by Commonfund on May 22, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | People

Catherine Keating Delivered UVA Law’s 2017 Commencement Address on Sunday, May 21, 2017.

Read now

The Misperception of Illiquid Investments

Posted by Kent Scott, Paul Von Steenburg, Timothy Yates, Jr. on May 15, 2017

Topic: Asset Allocation | Industry Knowledge | Investment Strategy | Outsourced Investing | Real Assets | Risk Management

With many market participants expecting low nominal returns across traditional asset classes in the coming years, investors may be looking to increase their exposure to illiquid asset classes such as private equity and venture capital. This article addresses head-on, investors’ misperception about illiquid investments: they aren’t as illiquid as many fear.

Read now

The Absent Superpower

Posted by Commonfund on Apr 27, 2017

Topic: Industry Knowledge

In this Commonfund Forum 2017 Spotlight, geopolitical strategist and author Peter Zeihan examines how the hard rules of geography are eroding the American commitment to free trade; how much of the planet is aging into a mass retirement that will enervate markets and capital supplies; and how, against all odds, it is the ever-ravenous American economy - alone among the developed nations - that is rapidly approaching energy independence.

Read now

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

Posted by Keith Luke, Paige L. Rabalais on Apr 24, 2017

Topic: Asset Allocation | Industry Knowledge | Investment Strategy

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 and investment costs – typically CPI + 5 percent – is much harder today than previously.

Read now

Monkeynomics

Posted by Commonfund on Apr 20, 2017

Topic: Industry Knowledge

In this Commonfund Forum 2017 Spotlight, Dr. Laurie Santos demonstrates that primates have much to teach us about our own economic decision-making. Both monkeys and humans know a bargain when they see one, tend to spend rather than save, and allow context and risk aversion influence choice.

Read now

2016 NCSE Key Findings [Infographic]

Posted by Commonfund Institute on Apr 20, 2017

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

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 NACUBO-Commonfund Study of Endowments. This annual report studies, on average, over 800 educational institutions that include U.S. educational institutions, private colleges and university endowments, public educational endowments, institution-related foundations (IRFs) and combined public endowment/foundations.

Read now

Is the Endowment Model a Crowded Trade?

Posted by Mark J.P. Anson on Apr 11, 2017

Topic: Asset Allocation | Industry Knowledge | Investment Strategy | Risk Management

With core tenets of the endowment model seemingly under stress for the last several years, some investors have questioned the long-term viability of the model. At issue: Are too many investors piling into the same ideas and thus squeezing out opportunities for better returns? In this 2017 Commonfund Forum Spotlight, three CIOs tackled questions designed to surface concerns about the model and provide insight based on their long experience.

Read now

Forum 2017 Attendee Statistics [Infographic]

Posted by Commonfund Institute on Apr 7, 2017

Topic: Industry Knowledge

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 tactical opportunities that can help support the missions of their institutions.

Read now

No More Gatekeepers

Posted by Commonfund on Apr 6, 2017

Topic: Industry Knowledge

In this Commonfund Forum 2017 Spotlight, founder of DonorsChoose.org Charles Best shares how as a 24-year-old teacher at a Bronx high school, he created a model of giving hailed as "the future of philanthropy" by The New York Times. Charles connects this story to the rise of Kickstarter and Etsy, sites that--like DonorsChoose.org--enable anyone to go public with their originality. These sites signal a profound change in how long you have to wait, who you have to know, and how lucky you have to be, to bring a good idea to life.

Read now

Commonfund Returns
to New York City

Posted by Commonfund on Apr 4, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

Commonfund, a prominent investment manager for endowments, foundations and public pension investors, announced today it has returned to New York City with the opening of a new office at 280 Park Avenue. The firm’s New York office will enhance access to clients and investment managers, as well as expand the firm’s footprint in the region. In addition to New York, Commonfund has offices in Connecticut, San Francisco, London, and Beijing.

Read now

Viewpoint:
Counting the Cost

Posted by Commonfund Institute on Mar 30, 2017

Topic: Governance and Policy | Industry Knowledge

How much does investment management cost? Fiduciaries, donors and stakeholders at endowed institutions have a strong interest in finding a good answer to this question, particularly in this era of low returns when costs may occupy a comparatively large proportion of the total return percentage. But achieving that goal is harder than it seems. In our white paper of 2015, “Understanding the Cost of Investment Management,” we outlined the types of cost that institutions pay— including those that are not specifically invoiced, and of which many fiduciaries may be unaware. This year, we enlisted the aid of institutions participating in the NCSE to dig more deeply into one of the main factors that influence investment cost: the investment vehicles employed in managing the portfolio.

Read now

10 Key Takeaways from
Commonfund Forum 2017

Posted by Commonfund Institute on Mar 29, 2017

Topic: Industry Knowledge | Investment Strategy | Market Commentary

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 3-day conference to explore cyclical trends and tactical opportunities that can help support the missions of their institutions. More than 60 experts in academia, public policy and government convened in General Sessions, Major Addresses and Breakout sessions. Here are 10 key takeaways from Commonfund Forum 2017.

Read now

National Carbon Pricing Webinar

Posted by Commonfund Institute on Mar 28, 2017

Topic: Industry Knowledge | Responsible Investing

The Bard Center for Environmental Policy and the #PutAPriceOnIt campaign will host a national webinar April 5th at 7 pm ET, on carbon pricing for colleges, universities, and community groups. Schools and organizations across the U.S. are invited to participate in this event, which includes a free screening of the Years of Living Dangerously episode “Priceless,” followed by an expert panel discussion.

Read now

Long-Term Trends for Long-Term Investors

Posted by Commonfund on Mar 27, 2017

Topic: Industry Knowledge | Investment Strategy | Market Commentary

As 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 that may take years to play out but can also prove to be very profitable. Recently at Commonfund Forum 2017, a panel convened to discuss their expert insights into some of the most compelling long-term trends...

Read now

Meeting the
Challenge of CPI +5%

Posted by Commonfund on Mar 21, 2017

Topic: Asset Allocation | Equities | Industry Knowledge | Investment Strategy | Private Capital

Despite the fact that the economy is expanding and the S&P 500 has been up for eight straight years, many nonprofit investors haven't been feeling the benefits as the main tenets of the endowment model of investing have been hampered by the market environment. In this Commonfund Forum 2017 session, Commonfund President & CEO, Catherine Keating, provides insight into the challenges of meeting CPI + 5% for fiduciaries. To obtain a copy of the slides shown in this presentation, please contact your Commonfund relationship officer.

Read now

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.

Read now

Constraints Faced by Healthcare Endowments

Posted by 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.

Read now

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.

Read now

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.

Read now

Does Your Investment Policy Statement Account for Risk?

Posted by 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.

Read now

Healthcare Endowment Management: 3 Questions to Consider

Posted by 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.

Read now

Assessing the State of Healthcare

Posted by 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.

Read now

Drafting Your Investment Policy Statement: 10 Critical Issues

Posted by 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...

Read now

The Investment Policy Statement

Posted by Commonfund Institute, John Griswold 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.

Read now

Commonfund Forum: Exclusive Conference for Eligible Investors

Posted by Commonfund Institute on Nov 30, 2016

Topic: Industry Knowledge

Free to attend for qualified institutional investors, the annual Commonfund Forum is the must-attend annual conference. Hear from headline-making thought leaders on the topics that are important to your institution.

Read now

Does Your Institution Qualify to Attend?

Posted by Commonfund Institute on Nov 30, 2016

Topic: Industry Knowledge

The annual Commonfund Forum has grown into the must-attend annual conference for institutional investors. Year after year, Commonfund Forum continues to provide institutional investors with timely information, thoughtful analysis and unique perspectives — all from recognized experts in the worlds of investment management, economics, business and finance, government, academia, and the media.

Read now

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.

Read now

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.

Read now

How Does Board Structure Affect Performance

Posted by 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.

Read now

Intentional Endowments Network Forum

Posted by Commonfund on Oct 5, 2016

Topic: Industry Knowledge

Join a select group of investment leaders at Loyola University Chicago to discuss 21st century sustainability challenges and see speakers Hank Paulson and David Blood.

Read now

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.

Read now

Fiduciary Responsibility:
A Board’s Purpose and Role

Posted by 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.

Read now

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

Posted by Ryan Driscoll, Jon Speare, Michael Strauss on Sep 15, 2016

Topic: Industry Knowledge | Operating Assets

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.

Read now

Where Did Our Operating Income Go?

Posted by Ryan Driscoll, Jon Speare, Michael Strauss 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.

Read now

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.

Read now

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.

Read now

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.”

Read now

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.

Read now

Five Laws that Led to Uniformity in Nonprofit Governance

Posted by 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 ...

Read now

A Framework for Nonprofit Governance

Posted by 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...

Read now

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.

Read now

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...

Read now

Operating Charity Implements Risk-Based Investment Policy

Posted by 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"...

Read now

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.

Read now

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...

Read now