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Topic: Investment Strategy
Investing in the Creative Economy - Commonfund Coffee Talk
Investing in the Creative Economy In this Commonfund Coffee Talk, the Institute’s executive director, George Suttles, is joined by Upstart Co-Lab founding partner, Laura Callanan, to discuss impact...
Approach to Sustainability Assessment and Reporting
In recent years, sustainability-focused investing has taken on many names and has been at the center of polarizing political conversations. CF Private Equity’s approach to mandates surrounding...
Thinking Outside the Benchmark
Twenty years ago, Mark authored an article published in The Journal of Portfolio Management titled "Thinking Outside the Benchmark" to describe a new way of pension fund management. He concluded the...
Viewpoint | Top Concerns for Community Foundations: Donor-Advised Fund Regulations
Potential regulations on donor-advised funds (DAFs) and their effect on the philanthropic sector was the most-cited concern among community foundations in this year’s Council on...
Considerations for Smaller Institutions Seeking OCIO
Recent data from the Commonfund Benchmarks Studies indicate that smaller nonprofit institutions are using an Outsourced Chief Investment Officer (OCIO) for investment management more often than their...
Viewpoint | Top Concerns for Private Foundations: Financial Volatility and Target Returns
In this year’s Council on Foundations–Commonfund Study of Investment of Endowments for Private and Community Foundations® (CCSF; the “Study”) we asked a new question: What are the top two current...
How Nonprofits Eliminate the Noise to Strategically Achieve Long-Term Success
Commonfund has been partnering with boards and investment committees to design and implement investment structures that support and maintain intergenerational equity, the purchasing power of their...
Navigating Co-Investments in Today’s Environment
The macroeconomic landscape in recent years has presented certain challenges for both private equity General Partners (“GPs”) and Limited Partners (“LPs”). Deal activity and distributions were...
Seeking Alpha in A World of Private Equity Beta
Deep sector expertise is a differentiator in the pursuit of alpha-like private equity returns.
Adding Alpha through Emerging Investment Managers
Commonfund Forum 2024 convened a panel of emerging investment managers to spotlight their unique investment approaches. Moderated by Caroline Greer, managing director at Commonfund OCIO, the...
Viewpoint | Top Concerns for Independent Schools
For the first time since the inception of the Study, the FY2023 Commonfund Benchmarks Study® of Independent Schools (CSIS) report asked respondents to identify the top concerns for their...
CF Private Equity Closes its 4th Secondaries Fund at $1.1 BN
Commonfund Capital Secondary Partners IV, L.P. significantly exceeded its $750 million target.
Viewpoint | The Main Purpose of Independent School Endowments
The FY2023 Commonfund Benchmarks Study® of Independent Schools (CSIS) prompted survey respondents to select the main purpose of their school’s endowment for the first time.
Unlocking Sustainable Investment: Insights from Ethan Levine
At SuperReturn Energy, Ethan Levine, Managing Director, CF Private Equity, discussed the continued focus on sustainability and ESG, touching on net zero, decarbonization and climate pledges.
Key Factors in Asset Allocation Decisions for Endowments
There are several broad subjects that an effective investment policy statement (IPS) should include in its contents and address clearly and specifically as they relate to an endowed institution. This...
City of the Big Shoulders: Key Takeaways from our Chicago CIO/CFO Roundtable
For more than 50 years, Commonfund has been working with boards and investment committees to design and implement investment structures that support and maintain intergenerational equity - the...
Private Credit Today
On September 27th, Commonfund OCIO hosted an event in Minneapolis at the O’Shaughnessy Distilling Co. Following a tour and tasting at the facility, Nicole Melwood, Director, and Vincent Kravec,...
Is Venture Capital Going Back to the Future? Reemergence of the Power Law of Returns
The importance of manager selection is back.
Viewpoint | The Yin and Yang of Risk and Return
The conundrum of risk and return is that you can’t have one without the other. The key is finding the right balance for your foundation.
The Investment Policy Statement - A Commonfund Whitepaper
Successful investing for long-term funds requires a strategic investment policy statement. The plan must be specific, yet it also needs to be flexible.
Time to Reassess Your Cash Strategy
Bank safety amidst a confidence crisis It’s not hard to find sore spots in the economy. High rates of inflation have hit pocketbooks and balance sheets and initiated the steepest interest rate hikes...
Unemployment Appears Poised to Increase
Other than the impending recession, one of 2023’s most anticipated economic changes has been a labor market slowdown, with both economists and investors expecting a deceleration in economic activity...
Celebrate! 25 Years of NBOA: The Endowment Landscape
A deep dive into independent school endowment's trends FY2005-FY2022, including analysis of asset allocation, performance, spending and contributions, plus a perspective on future developments....
Including Risk Management in Your Investment Policy Statement – Where to Begin
Investment policy statements usually contain a section that purports to define the institution’s risk tolerance. But they frequently only gesture in the direction of risk, without actually examining...
Yesterday's Sector Laggards are Today's Leaders
Much to the surprise of market participants, global stocks have risen at an impressive pace year to date despite significant macroeconomic headwinds and regional bank troubles. In what can be deemed...
Shaping Your Board - Key Considerations for Success
The structure of a board can help, or hamper, its effectiveness, and consideration of these matters is important to improving a board’s performance. Factors such as size, board chair, diversity and...
Hedge Funds: Is Now Their Time to Shine?
Diversification may be underappreciated when both equity and fixed income allocations have been broadly positive. With both these allocations facing significant and potentially long-lasting...
Drafting Your Investment Policy Statement: 10 Critical Issues
Endowed institutions differ in their missions, capabilities and resources, and investment policy statements naturally mirror these differences. In that sense, there is no single ‘right’ investment...
Bond Market Expectations Take a Wild Ride
In today’s environment, commentary can seemingly become stale in periods as short as hours, let alone days. Just last month, we wrote how despite tightening lending conditions from banks, other...
CIO Roundtable - A Discussion on Investment Stewardship
At the 25th annual Commonfund Forum, in Boca Raton, Florida, we hosted a distinguished panel of CIOs who shared their perspectives on portfolio management. They discussed their best investment ideas,...
Secular Changes and Challenges Facing Nonprofits Today
Commonfund recently hosted its 25th annual Commonfund Forum, February 13-15th, in Boca Raton, Florida. The agenda included a range of sessions on relevant topics for institutional investors. This...
Spending Policy | Old Technology Still Dominates
Every year I eagerly await the release of the NACUBO Study of Endowments (NTSE) and, when I finally get it, I read it cover-to-cover. Despite reading all 195 pages, the two most frequent questions I...
Rate Hikes are Impacting Bank Lending Behavior
As investors grapple with adjusting to 450 basis points of rate hikes (and likely more in sight), the debate on just how quickly monetary policy will transmit through the real economy has returned to...
Markets Rally to Close 2022, but Sentiment Remains Dismal
Strong Fourth Quarter for Global Markets Following three quarters of bleak performance, global markets staged a rally to close what was a tumultuous 2022.
Supply Chains Take a Wild Ride
In 2021, the word was transitory. This described the expectations of Fed officials and many other prognosticators that elevated inflation would quickly return to the pre-COVID level of at or around 2...
Is Spending Policy the Other “Free Lunch” in Investing?
We believe spending policy not only should influence strategic asset allocation but should be thought of as the other "free lunch" of long-term endowment investing alongside diversification.
Benchmarks for Boards
This paper attempts to serve as a guide for trustees and boards that aspire to excel, with particular emphasis on the board’s fiduciary role.
Real Estate Takes a Hit from the Fed
In this chart of the month, it is commonly cited that monetary policy tightening has a lagged impact on economic activity. However, as the Federal Reserve drives the cost of capital higher, the...
Chart of the Month | The Shape of Inflation
The Consumer Price Index continues to surprise central bankers, commentators, and market participants alike. The latest headline reading of 8.2 percent, which reflects year-over-year price increases...
The Endowment Model Proves Its Worth (Again)
Unless you’ve been on a remote island with no Wi-Fi for the past nine months, you are well aware that it has been a rough start for capital markets. In fact, it has been a historically rough start to...
Asset Allocation: Controlling for the Variables
Our 2021 Council on Foundations-Commonfund Study of Foundations marked our 10th year in collaboration with Council on Foundations and the Commonfund Institute to measure, analyze and document the...
Research Shows 10-Year Returns for Foundations Reach Highest Point
Our 2021 Council on Foundations-Commonfund Study of Foundations marked our 10th year in collaboration with Council on Foundations and the Commonfund Institute to measure, analyze and document the...
Better Benchmarking: What Makes Your Institution Unique Matters
There is no doubt that benchmarking is a good practice for institutions to follow – we publish studies each year for various nonprofit sectors for that reason. While we think that benchmarking is...
Why Does Blockchain Matter?
We believe there is a generational platform shift underway in technology and its magnitude of impact could be as transformational as was the birth of the internet — and it is transparent,...
Is There Method in the Madness of Today’s Crypto Market Chaos?
In recent months crypto markets have experienced extreme volatility and drawdowns, and it is self-evident that the next “crypto winter,” or prolonged bearish period, is upon us. However, these price...
Aligning Spending Policy with Your Institution’s Long-Term Goals
Commonfund has designed a set of questions to help guide a committee—and staff—toward selecting the most appropriate spending policy. We have used these questions as a guideline for conversations...
Endowment Management: The Business of Independent Schools
Commonfund is proud to contribute a chapter to NBOA’s new book “The Business of Independent Schools – A Leader’s Guide” – a new edition of “By the Numbers and Beyond.” This publication provides...
Don’t Let Inflation be a One-Two Punch for Your Endowment
Investment committees overseeing the endowments of higher ed institutions need to think about inflation for two fundamental reasons.
Diversifying Your Fixed Income Portfolio With a Private Credit Allocation
Inflation, rising interest rates, inversion in the yield curve and the war in Ukraine combined to make 1Q22 a challenge for many asset classes and strategies. While there was the isolated shelter...
Is your Spending Policy Getting the Attention it Needs?
Spending policy is the most overlooked aspect of endowment management and many are likely not employing the optimal calculation for their institution. Many investment committees review "strategic...
CIO Roundtable
Fiduciaries are entrusted with fulfilling their organization’s mission largely through effective stewardship of financial assets. In the 50+ years since Commonfund was founded, perpetual investing...
Hitting the Hot Buttons: Investing for the Next 2 to 4 Years
Commonfund Forum 2022 featured an expert panel representing diverse perspectives to probe beyond the headline-grabbing news that has been driving financial markets in recent months. The accompanying...
Imagining What's Next for the Global Economy
If someone had told you in January of 2020 that the world would be plunged into a global pandemic the likes of which had not been seen since 1918, you probably would have guessed that the impacts on...
Commonfund Survey Finds Institutional Investors Increasingly Cautious Amid Heightened Economic Risks
Institutional investors representing $170 billion in total assets cite inflation and geopolitical tensions as top economic concerns for 2022 Majority of investors expect lower-than-average U.S. stock...
Viewpoint: The Move in Marketable Alternative Strategies
In the 2021 Commonfund Benchmarks Study® of Independent schools we continue to see the allocation to marketable alternative strategies decline, raising questions about why and whether it will...
Viewpoint: The Short and Long of It
There’s a lot to consider in each annual Commonfund Benchmarks Study® of Independent Schools, e.g., asset allocation, spending, gifts and donations, responsible investing and more. This year is no...
Endowment Spending - A Look Back
Gain a better understanding of how educational institutions evaluate spending policies today.
Commonfund's Third Annual Invitational Diverse Manager Day
From February 9th-11th, Commonfund held its third Diverse Manager Day event, with 20 managers identified through its Diverse Manager Portal and other sources. These diverse managers1 cover a broad...
The Price of Liquidity - Commonfund Coffee Talk
The Price of Liquidity for Perpetual Investors Our third and final Coffee Talk focused on the most important and impactful decision endowments and foundations can make within their strategic asset...
The Most Overlooked Element of the OCIO Relationship
When properly implemented, outsourcing the investment of nonprofit assets can help institutions establish governance processes, manage a complex portfolio, and navigate operational complexity and...
Constructing Investment Portfolios for Endowments
There are fundamental principles of effective endowment management that we have organized into what we call “the 6 Ps of Investment Stewardship” – Purpose, Policy, Process, Portfolio, People and...
Commonfund's Guide to Outsourcing
With limited time during the year, maximizing effectiveness is key for your committee. Many nonprofit investors are pursuing outsourcing their CIO to a fiduciary partner who can dedicate the...
Tools for Creating Effective Strategic Policy
Commonfund has worked with nonprofit investors for 50 years. Over that time, we have developed a set of proprietary tools and data to assist boards and investment committees in their quest to create...
Allocating to Illiquid Investments
Stewards of endowments have long been advised that allocating to illiquid investments is critical to achieving long-term returns. Rather than trust conventional wisdom, Commonfund conducted research...
Viewpoint | The Ever-Evolving 80/20
On average over the past decade, independent schools participating in the Commonfund Benchmarks Study® of Independent Schools have maintained an asset allocation that stays within a few percentage...
The Tech Effect and Direct Venture Growth Investing
The venture growth and late stage venture capital (“VC”) market has matured over the last 10 years, and direct investing has emerged as an attractive strategy for Limited Partners (“LPs”) to...
Board of Trustees and Investment Committee Roles and Responsibilities
There are fundamental principles of effective endowment management that we have organized into what we call “the 6 Ps of Investment Stewardship”– Purpose, Policy, Process, Portfolio, People and...
Investment Governance | Are You Asking These Three Questions?
In the midst of a global pandemic, many non-profit business models are being challenged which has put significant pressures on staff, governing boards and committees. These pressures on time and...
Foundation Spending Strategy – Meeting the Moment in 2020 and Beyond
This year has been incredibly difficult. One of the most contentious and turbulent presidential elections and transitions in American History. COVID-19 and the consequential social and economic...
Implications of Increased Spending for Foundations
In this Commonfund Xchange, Commonfund Institute Executive Director, George Suttles, moderated a discussion with two leading practitioners: Mary Reynolds Babcock Foundation Chief Finance and...
A Financial Framework for the COVID Crisis
Despite the fall semester looking much better than the worst-case scenarios contemplated in early summer, higher education in America continues to grapple with the enormous challenges that the...
How to Measure Private Equity Investments
Private capital investors use a particular set of quantitative and qualitative measures to assess performance. While the standard benchmarks used for marketable securities are sometimes applied to...
Should We Issue an Investment Manager RFP? 7 Key Considerations
Best practice for nonprofits is to issue a Request for Proposal (“RFP”) for an investment management partner every market cycle. Typically, that is at least every 7 to 10 years, or as it is...
Top Hedge Fund Investors - Ten Years Later
In July 2010, I published the book Top Hedge Fund Investors: Stories, Strategies, and Advice. My co-author and I interviewed nine leading allocators to hedge funds, including one Mark Anson, who...
Balancing Purpose, Payout, and Permanence: A Strategy Guide for Foundations
In partnership with the Council on Foundations, the National Center for Family Philanthropy has released Balancing Purpose, Payout, and Permanence: A Strategy Guide. Commonfund Institute is very...
Chart of the Month | Inflation Expectations Surge, Driving Real Interest Rates Down
Chairman Powell’s speech at Jackson Hole during the last week of August confirmed the Fed’s dovish policy stance, giving investors ample support in terms of low rates and a flexible inflation...
Observations on Diverse Manager Selection Across Asset Classes
At Commonfund, we believe diverse managers offer clients access to investment talent and valuable investment opportunities and therefore should be explored and invested in. Overlooking the merits of...
Principles of Investment Stewardship for Nonprofit Organizations
The Principles of Investment Stewardship for Nonprofit Organizations provides an overview of essential principles for fiduciaries that oversee long-term funds.
Cultural Institutions and the COVID-19 Crisis
Board members, investment committees, and senior staff are charged with the fiduciary responsibility to make informed decisions when guiding the investment activities of their organization. The...
Capturing Credit Opportunities in Times of Crisis
Key takeaways During periods of dislocation in high-quality credit, investors should stay the course within fixed income portfolios and maintain active risk to benefit from the inevitable rebound...
Real Estate – Can’t Touch This!
Few markets have been as heavily impacted by the onset of the global pandemic as real estate. Real estate is considered a hard asset that “you can touch and feel”, but during a pandemic no one wants...
Enhancing Investment Stewardship with Fund Governance Analytics
Strong board performance is critical for every organization dedicated to achieving its mission, which is why Commonfund Institute makes it our mission to advance best investment stewardship...
Increasing Giving During COVID-19: Thoughts for Philanthropy
The Council on Foundations has acted to support its members, their nonprofit partners, and the people and communities hit hardest by the impacts of COVID-19 by asking members to sign a pledge of...
Balancing Risk and Return
Risk surrounds us, and for investment fiduciaries it is inescapable if meaningful real returns are to be sought. While risk and return constitute the axes upon which investment portfolios are built,...
Seven Ways to Diversify Your Private Equity Portfolio
A strong private capital program requires consistent, diversified investing over time. It is also necessary to have— or obtain externally— resources for research and due diligence before you invest;...
Stewarding Foundations Through the COVID-19 Crisis
The COVID-19 crisis has put tremendous strain on local communities across the country and foundations have been asked to rise to the challenge while endowments have declined in value due to market...
Crisis Response: A Framework for Strategic Decisions
With the equity markets retracing some of the losses that occurred in the first calendar quarter of 2020, endowment market values are likely recovering more quickly than we may have feared during the...
Do Bear Markets Favor Active or Passive Investing? It Depends.
In the ongoing debate about active versus passive investing, conventional wisdom posits that active investing outperforms passive in recessionary or bear market environments. The question is: Will...
Coronavirus: Five Key Questions for Nonprofit Institutions
There is no question that we are in unprecedented times and will likely remain so for longer than we anticipated even a few weeks ago. The speed at which a new reality has been imposed on all of us...
Long-Term Equity Investors: A Global Perspective
Over the past decade U.S. equities have consistently outperformed international markets, leading many investors to question the role of non-U.S. equities in their portfolio. While the current cycle...
A Global Perspective for Long-Term Equity Investors
Watch this short video on our Global Perspective for Long-Term Equity Investors. Over the past decade U.S. equities have consistently outperformed international markets, leading many investors to...
Commonfund’s First Invitational Diverse Manager Day
On January 16th Commonfund held its first invitational Diverse Manager Day. The day was made possible as a result of the success we had from submissions to the Diverse Manager Portal launched last...
2020 Investor Survey: Private Markets Sentiment
For the third year in a row, Commonfund Capital conducted a year-end annual survey of institutional investors to gauge their sentiment about private market investments. Survey responses totaled 267...
Impact Investing Trends - A Market Matures
Investment strategy influenced by altruistic intentions – broadly, impact investing – has long held sway in a small number of portfolios. Historically, impact investing has failed to gain significant...
Tactical Allocation: Winning Strategy or a Fool’s Game?
Institutional investors overseeing long-term pools of capital typically define their strategic asset allocation with specific targets and bands or ranges around those targets, which allow for...
Announcing the Commonfund Diverse Manager Portal
In the fall of 2018, Commonfund announced the creation of its Diversity and Inclusion Office with the mission to “intentionally promote and foster inclusion and equity across Commonfund and our...
Commonfund Launches Diverse Manager Portal
Commonfund Launches Diverse Manager Portal to Broaden Client Access to Diverse Investment Talent Wilton, CT, September 10, 2019 — Commonfund, a prominent asset manager for endowments, foundations and...
Looking at Gender Lens Investing
What is Gender Lens Investing? Gender lens investing has garnered significant traction in the last decade. Broadly speaking, it aims to achieve financial returns and benefit women. Given the breadth...
Emerging and Diverse Manager Programs: Worth Doing Well
Michael Rowland was the Commonfund Institute Summer Intern in 2019. When this was published he was a rising senior at Case Western Reserve University majoring in Finance and Accounting. What are...
Recession – Maybe This Time is Different
The July Federal Open Markets Committee (FOMC) meeting signaled the end of central bank rate normalization with the first rate cut in more than a decade. The last time the FOMC cut rates was in...
Investment Manager Fees Part II: Creating Alignment
In Part I of this blog series, “Investment Manager Fees: Out of Sight, Out of Mind”, we discussed our approach to determining the value of an asset manager and how we might calculate a fair price for...
Investment Manager Fees: Out of Sight, Out of Mind
One of the most pressing questions facing fiduciaries is that of investment management fees. We think it is a healthy and necessary discussion, as even small fees can have a big impact on performance...
CIO Roundtable: The Past, Present and Future of Endowment Investing
Fiduciaries of nonprofit organizations are entrusted with fulfilling the missions of their organizations in large part through effective stewardship of financial assets. In the 50 years since the...
Taking a Fresh Look at Spending Models
Investors have limited control over the returns their portfolios generate. They have more control over their spending. That doesn’t make it easy. Compared to some earlier periods, volatility in the...
Playing to Win
In this Forum 2019 general session, Commonfund experts share research into much of the conventional wisdom around institutional portfolio management, with some surprising results into which...
The Fallacy of Manager Diversification – How “Horse Races” Can Increase, Not Reduce Risk
On the surface, hiring two (or more) multi-asset managers to manage an entire portfolio may seem like a good idea. Intuitively, it would seem to reduce manager concentration risk, and provide...
How to get Started in Responsible Investing
The biggest challenge in implementing any type of responsible investment program is in clearly defining and prioritizing those issues most relevant to an organization. Although it may seem a...
Stormy Markets, Steady Institutional Investors
This blog is reprinted with permission by Net Assets, published by the National Business Officers Association (NBOA). The original article can be found here. Investment guidelines enable institutions...
Investment Strategies for Long-Term Investors
Kris Kwait, Deputy CIO and Head of Investments, discusses investment strategies for long-term investors in the current market environment.
A Cost-Effective Approach to Hedge Fund Allocations: Part 2
Let’s start with a quick recap of Part 1 of this story, which can be boiled down to three main points: Investors often spend too much for market beta, paying “2 and 20” for hedge funds that deliver...
A Cost-Effective Approach to Hedge Fund Allocations: Part 1
At the risk of beating a dead horse, hedge funds are not an asset class. This is especially true in the way in which Commonfund selects and constructs its hedge fund portfolios: focusing...
Are You Ready for the Next Crisis?
Ten years ago Lehman Brothers failed, representing the largest bankruptcy in history, and accelerating a global financial crisis that would knock many non-profit portfolios backward. This came on the...
The Four P’s of Investment Decisions: Lessons from the Commonfund Institute
Three days after becoming Executive Director of the Commonfund Institute, I found myself at Yale University in New Haven giving welcoming remarks at our annual educational program. Although I will...
Equity Portfolio Construction – Through a Risk Factor Lens
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...
Essential Not Optional: A Strategic Approach to Fundraising
Fundraising for endowments has become an essential strategic capability that endowed institutions will have to build or acquire in order to thrive.
Assessing your Board's Risk Tolerance
To provide a deeper understanding of what board and investment committee members can do to improve their ability to assess risk tolerance, Commonfund has prepared a white paper discussing lessons...
Bonds: Unwanted and Unloved but not Unnecessary
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...
Inflation is Expected to Rise. How Can Investors Protect Portfolios?
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...
Real Estate Credit Environment: Risk Off - Risk On
Earlier last year real estate markets received a scare as CMBS spreads widened, particularly in lower rated and more junior tranches. Additionally, one of the most respected U.S. real estate research...
Striking the Balance: A Fiduciary Approach to Risk and Investment Policy
Discover how to effectively balance risk and return as a fiduciary in your investment portfolios.
Investing in Diversity
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...
Evolving Asset Allocation and Policy Portfolios
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...
Baring Their Teeth – FAANGs Take a Bite Out of the Equity Market
Narrow market leadership in the U.S. and Emerging Markets proves challenging for active managers Narrow markets are not uncommon to equity investors. They tend to manifest themselves during the best...
A Gap In Reality
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...
When Leaks Turn into Floods: Challenges Facing Higher Education
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 the...
Bonds May Not Be Loved, But They Shouldn't Be Forgotten
Summary TODAY, THERE IS A GOOD DEAL OF HAND WRINGING OVER THE RISK OF RISING RATES. WHILE RISING LONG-TERM RATES COULD BE A HEADWIND FOR CORE FIXED INCOME, AS LONG AS RATES RISE FAIRLY MODESTLY THE...
Spending Policy: Is Yours Ready for the Next Downturn?
In most Investment Policy Statements there is often a reference to two important, but conflicting, objectives: one, to preserve the purchasing power of the long-term portfolio in real terms, and two,...
Emerging Market Equities Turn the Corner
As we progress through calendar year 2017, we have witnessed the continuation of the equity bull market started in 2009. One difference however, is that leadership has turned (finally!) to non-U.S...
On Complacency | Why Risk Management Always Matters
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...
Outsourced Investment Management: An Overview for Decision Makers
An institution’s decision to work with an OCIO provider will likely depend on several factors. Learn more on on Outsourced Investment Management by...
Hedge Fund Land: An Expensive Amusement Park?
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...
How Much Beta is in Your Equity Portfolio?
Leveling the Field in the “Tug of War” Between Active and Passive… Active Equity Manager Universal Objective: Outperform the Passive Alternative It’s undeniable that every active equity manager’s...
Making the Case for Investing in Natural Resources
The natural resources sector is often characterized as cyclical, as producers and service providers experience underlying exposure to and commensurate volatility of commodities in the oil and gas,...
Thoughts on the Role of Credit in Institutional Portfolios
While most institutional portfolios have allocations to investment grade corporate credit, as a strategic allocation high yield and emerging market credit (liquid credit) are sometimes overlooked....
Flexing Your Global Portfolio Can Lead to ACWI Fatigue, but Don't Throw in the Towel Yet
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 (MSCI ACWI) vs. the Standard & Poor’s...
Not So Free: Implications of New York’s Excelsior Scholarships
Key Insights 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...
Active Fee Management: Notes from the Front Lines
Few topics get investors’ 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...
The Misperception of Illiquid Investments
With many market participants expecting low nominal returns across traditional asset classes in the coming years, the challenge of structuring a portfolio to achieve CPI +5%, or long-term purchasing...
Maintaining Purchasing Power in Today’s Environment | CPI + 5%
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...
CIO Roundtable: Is the Endowment Model a Crowded Trade?
Stuck in the past or ever-evolving? The endowment model gets a hard look eight years into the current market cycle. With core tenets of the endowment model seemingly under stress for the last several...
The Crowded Liquidity Trade
The liquidity markets have experienced one of the largest disruptions since the inception of SEC Rule 2a-71 in the early 1970’s. Over the past few months, we have seen a massive shift of investor...
Long-Term Trends for 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...
What do the Cable Television and Hedge Fund Industries Have in Common?
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”...
Private Credit Opportunities – Direct Lending to U.S. Middle Market Companies
Much has been made of the challenges endowment, foundation and nonprofit investors face in achieving a CPI+ five percent return target. One way to improve the probability of attaining this goal is to...
Healthcare Endowment Management: 3 Questions to Consider
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....
Venture Capital - Looking Forward and Upward
Beginning in the second half of 2015, there was growing caution that started to impact pricing and investment activity in early 2016. This valuation cooling period and subsequent shift in mindset...
A False Sense of Diversification?
As we have undergone the process of re-underwriting all of Commonfund’s equity managers and funds over the last 6 months, we have tackled anew the age old question of how many funds does one...
Real Estate – Rates, Rates, Rates
“There are three things that matter in property: location, location, location”. While the age-old adage still holds in many respects, real estate risks, as with the risks associated with all asset...
It's Not Easy Being Active
It’s not easy being an active equity manager these days. As the chart below depicts, active managers have just come through the worst period for returns in several decades. The chart shows the...
Integration of ESG Factors in Practical Steps
In the current climate of slow global economic growth and resource constraints at many institutions, integration of ESG considerations in an organization’s investment portfolio may be perceived as a...
Active Management Fatigue and What to Do About It
Active management has struggled for several years, raising questions about whether active management can ever outperform again. Traditional active manager style tilts, like value and size, have...
Operating Charity Implements a Risk-Based Investment Policy
An operating charity in the Northeast is in the process of implementing a risk-based investment policy for its $30 million endowment. The organization’s seven-member Investment Committee includes...
Ideas for Next Gen Energy 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...
Unhedged Commentary: The $3 Trillion Question
Reprinted from Institutional Investor’s Alpha Spring 2016 issue The growth of the hedge fund industry over the past decade has been tremendous, with more and more institutional and retail investors...
The Big Picture: Integrating Investments, Finance and Development
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...
Asset Allocation with Private Equity
Reprinted from Volume 17, Number 1, 2016 of The Journal of Investment Consulting by Mark J.P. Anson Private assets such as private equity and venture capital have long been a thorn in the side of...
What is an OCIO?
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...
Emerging Markets: Balancing Risk and Reward
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’...
Hedge Funds: How Many (or Few) Does it Take?
It’s straightforward to get an answer to that question, at least superficially: draw at random from a manager universe, build hypothetical portfolios with the selected managers, track performance,...
Is Currency an Asset Class?
Currency risk can best be described as the surprise impact that currency exposure has on an investment portfolio. Although currency risk typically confounds investors, it is easy to measure – it is...
Rethinking Risk and Diversification
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....
Size: It's Complicated
Assets under management (AUM) among hedge funds has always been characteristically top-heavy, with the majority of capital in the hands of a relatively small number of managers. While the hedge fund...
Multi-Asset Investing: Form Follows Function
The design axiom captures the purpose of multi-asset investing Interest in multi-asset investing is growing and the inflows confirm it: Institutional assets committed to multi-asset investing are...
Viewpoint: A Different Kind of Climate Change
How have cultural, religious and social service institutions’ investment portfolios changed in response to the financial and market environment that has prevailed over the last several years? While...
Educational Alpha Podcast: A Conversation with Mark Anson