An Established Investment Strategy
Our investment strategy is based on the endowment model of investing that we helped create, refine, and enhance over the past 50 years. We focus on three basic principles of an equity bias, diversification, and prudent use of illiquid investments. Risk management efforts and mission-aligned investing methods are part of everything we do. We believe in collaborating with you to create the investment solution that best meets your specific needs.
Outsourced CIO Services
As a leader in outsourced CIO (OCIO) services specifically for nonprofit organizations, Commonfund OCIO offers a range of approaches and resources based on individual client needs. With this singular focus, we’ll provide you advice and insight into every facet of managing your institution’s finances.
Rankings shown from Pensions & Investments were published in July of 2026 and are based on reported assets under management as of March 31, 2026. Commonfund did not pay a fee to be included in such report. Read more about survey rankings and awards.
Private Equity Solutions
CF Private Equity invests with global partners into small- and mid-size companies in growth markets and industries focused on technology, energy, and services, as well as industries in transition. Partnering with many of the world’s leading private investment firms, we create focused, strategic-specific portfolios. Programs include:
Buyouts & growth equity | Venture capital | Real assets and sustainability | Co-investments | Secondaries
Mission-Aligned Investing
Learn MoreOur investment solutions are designed to enhance your financial resources while taking into account the unique needs and requirements of your organization. Commonfund offers guidance and investment expertise for those clients that want to align their portfolio with their mission.
Our Investment Philosophy
Equity Bias
Growth assets, Active and passive, Inflation hedge, Fee efficiency
When allocating to public equities, we seek to separate the component pieces of investment returns (such as market beta) and factor exposures (like size or style) from true manager skill, or alpha. A core step in Commonfund’s manager evaluation process is isolating these components of return using a range of quantitative tools. We aim to allocate to the most skilled managers, such that the resulting blend of components provides the desired risk and return profile to the portfolio, avoiding overlapping exposures and highly correlated sources of return. This analysis generally allows us to pay active management fees only for diversified alpha generation, not for concealed market beta.
Diversification
Manager decomposition, Economic factors, Risk premia, Alpha identification and diversification, Bottom-up risk construction
Commonfund believes that effective diversification is no longer achieved by simply allocating to different geographic regions, investment styles or market capitalizations. With more efficient markets, correlations have increased. This is why we focus on identifying returns uncorrelated to market movements as well as returns uncorrelated among managers (e.g., avoiding “crowded trades”). Our bias for allocating to hedge funds, for example, is to minimize market exposure—that is, to have little or no market beta in hedge fund strategies. In fixed income, we seek bond strategies that generate excess returns over core bond indices through yield curve management, credit selection, and/or sector allocation.
Liquidity Premium
Measurable, Access is critical, Discipline of fund size and sector focus, Capital efficiency
It is now possible to measure and track the existence of the liquidity premium earned over periods of time. This lets you potentially take advantage of periods during which the market is willing to pay investors more for providing capital to illiquid investments. Our bias is for investors to have policy allocations to illiquid strategies to the level that is practical for your institution’s risk tolerance and "appetite for liquidity".
Model Long-Term Portfolio
Income and Diversification
Fixed Income
Opportunistic
Diversified alpha
More concentrated
Core Bonds
U.S. focused
Low tracking error
Alpha Strategies
Low beta hedge strategies
Liquidity Premium
Private Strategies
Private equity
Private real estate
Private credit
Long-Term Growth
Equity
U.S.
Low tracking error
High information ratio
Highly diversified
Active/Passive
Non-U.S.
International and emerging markets
High tracking error
More concentrated
Active/Passive
Factor Strategies
Systematic
Diversified
Income and Diversification
Fixed Income
Opportunistic
Diversified alpha
More concentrated
Core Bonds
U.S. focused
Low tracking error
Alpha Strategies
Low beta hedge strategies
Liquidity Premium
Private Strategies
Private equity
Private real estate
Private credit
Long-Term Growth
Equity
U.S.
Low tracking error
High information ratio
Highly diversified
Active/Passive
Non-U.S.
International and emerging markets
High tracking error
More concentrated
Active/Passive
Factor Strategies
Systematic
Diversified
How We Seek to Add Investing Value
Strategic Asset Allocation
Portfolio Construction and Manager Selection
Tactical Asset Allocation
- Model unconstrained portfolio
- Incorporate client-driven constraints
- Simulate model portfolio outcomes
Strategic asset allocation is the most important investment decision impacting performance and risk. Our process is to work collaboratively with each client to develop this strategic allocation. The ultimate decision on strategic asset allocation is made by the client based upon their return objectives, risk tolerances and a variety of inputs and potential constraints. We use a wide range of financial and operating metrics with a focus on broader organizational considerations and pressures. We believe this leads to a more comprehensive approach to endowment management than more traditional mean variance optimization models that can be limiting for institutions with long-term investment horizons.
- Source alpha
- Diversify beyond beta
- Align interests with investors (managing fees and expenses)
Investment decisions on portfolio construction are team-based and led by our chief investment officer. Our investment committee reviews client portfolios monthly to determine and approve investment strategies, portfolios, products, and the investment managers needed to construct each portfolio. We scour the globe to find managers that we believe bring unique skills and perspectives shaped by a wide range of backgrounds and experiences. The team also evaluates performance at the strategy, fund, manager, and client portfolio level, while also monitoring client investment restrictions, fund liquidity, and fund leverage. Manager research, due diligence, and selection is the broader responsibility of the investment team.
- Monitor and assess 7 key tactical indicators
- Evaluate client portfolios
- Rebalance quarterly
Commonfund uses tactical asset allocation selectively when our investment conviction is high and supported by data. Decisions are subject to the following guidelines:
- Strategic allocation takes precedence - tactical is used selectively.
- Manager selection and allocation are not driven by tactical views.
- Tactical decisions are based on 6-18-month views and are not short-term trades.
- We measure and control our risk from tactical decisions to ensure they do not override any potential manager alpha.
Get More Investment Management Insight
Principles of Investment StewardshipUncover the key issues and essential principles to consider when making decisions about your investment, in regard to your portfolio, process, purpose, and more.
Frequently Asked Questions
The endowment management is the professional oversight of an institution's investment portfolio — typically for nonprofits like colleges and universities, foundations, and cultural institutions — aimed at generating long-term returns that fund the institution's mission while preserving purchasing power over time.
Effective endowment management is guided by a long-term, mission-driven approach rather than short-term market timing. Commonfund organizes this into what we call the 6 Ps of Investment Stewardship: Purpose, Policy, Process, Portfolio, People, and Performance.
The endowment model is an investment strategy that Commonfund helped pioneer and refine over 50 years, built on three principles: an equity bias, diversification, and prudent use of illiquid investments.
Institutional portfolio management is the professional management of investment assets on behalf of an organization — endowments, foundations, pensions, or nonprofits — and it's built around a clear governance structure to ensure accountability at every level.
The Liquidity premium is the additional return investors can earn for committing capital to illiquid strategies (like private equity or real estate). Commonfund helps clients determine the right allocation based on the institution's liquidity needs, target returns, and risk tolerance.
Interested in Commonfund?
Get in touch with us
Telephone / General Inquiries: (888) 823-6246
Client Account Assistance: (888) 823-3863
Media Inquiries: Emily Roy at Prosek Partners (646) 818-9232 or email our media partner.
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