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Risk Management

Balancing Risk and Return

Posted by Commonfund on Jun 11, 2020

Topic: Investment Strategy | Risk Management

While risk and return constitute the axes upon which investment portfolios are built, return is almost always given primacy in investment policy statements (IPSs) and frequently becomes the main driver of decisions that shape the portfolio. So, how do you balance risk and return objectives in your investment policy?

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

Posted by Deborah Spalding, Kristofer Kwait on Oct 4, 2019

Topic: Asset Allocation | Investment Strategy | Risk Management

Institutional investors overseeing long-term pools of capital typically define their tactical allocation with specific targets and bands or ranges.

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Risk Management and Operations:
5 Takeaways from Commonfund Forum 2019

Posted by Amy Harlacker, Dana Moreau, Brian Rondeau on May 17, 2019

Topic: Risk Management

The majority of investors’ attention is often focused on the performance of the funds or managers in their portfolio. And rightfully so. The numbers that appear on statements month after month will determine to a large extent whether an institution can continue to pursue its mission over an extended period of time. But those monthly performance statements are not the only arbiters of success or failure in the investing sphere. The areas of risk, legal and compliance, operations and...

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Equity Portfolio Construction – Through a Risk Factor Lens

Posted by David Scarozza on Jun 28, 2018

Topic: Equities | Investment Strategy | 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...

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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...

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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.

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How Much Beta is in Your Equity Portfolio?

Posted by David Scarozza on Jul 18, 2017

Topic: Asset Allocation | Equities | Investment Strategy | Risk Management

It’s undeniable that every active equity manager’s chief competitor these days is the passive alternative against which its investors measure their performance. This is as true for a singularly focused equity mandate manager as it is for an organization like Commonfund, who assembles multi-manager active risk equity portfolios that seek to exploit the potential advantage of scouring the globe in pursuit of strategies that offer both the possibility for excess returns and excess return source diversification.

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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.

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The Misperception of Illiquid Investments

Posted by Timothy T. Yates, Jr., Kent Scott, Paul Von Steenburg 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.

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

Posted by David Scarozza on Feb 28, 2017

Topic: Asset Allocation | Hedge Funds | Investment Strategy | Risk Management

These industries may seem an odd pairing, but both are in the midst of a disruption-led, industry-wide rationalization process. The two industries share in common a historically evolved “bundling” price structure, heavily favoring the sellers, that is breaking down due to the recent proliferation of distribution alternatives. This is giving consumers the option to be far more choosey about the prices they are willing to pay for varying levels of content.

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