Many factors may impact the long-term performance of your investments; that’s why it’s important to responsibly approach every decision regarding your funds. Our investment programs are designed to enhance your financial resources while taking into account the potential effects of environmental, social, and governance (ESG) factors. These are fundamental to our investment analysis process across all asset classes and at the core of the United Nations’ Principles for Responsible Investment (PRI). Commonfund is proud to be a signatory to the PRI since 2013.
To help your organization form an approach to responsible investing and determine your priorities, we’ve developed a proprietary framework that includes public and private investment programs, such as:
This image is for illustrative purposes only, with no guarantee that future programs will be offered. Subject to adjustments. This presentation is not intended to constitute an offering of interests in any partnership, which will be made solely by means of a Confidential Offering Memorandum provided to qualified investors. For a complete description of the terms of these offerings, please refer to the Confidential Offering Memorandum which investors should read with care. Please see Important Notes. Any such offerings will be made solely through private placements to qualified investors, and will be made by Commonfund Securities, Inc., a registered broker dealer, and member of the FINRA.
Our portfolio construction process entails three primary steps.
ESG considerations are reviewed alongside more traditional indicators like team, strategy, performance, and terms of investment. Before hiring managers, we ask them about whether and how they integrate analysis of financially material ESG factors into their investment process. After they’re hired, managers reevaluate their answers annually, or, in private capital programs, when a re-investment decision is being made. In addition to ESG factors, we also promote diverse managers in our client portfolios.
This is also important when it comes to proxy voting; as a manager-of-managers, we direct our managers to vote proxies on our behalf and ask them to consider whether ESG factors are material to the investment performance of the company in question, as well as to support proposals addressing these factors.
We conduct periodic, targeted reviews of our portfolios to assess their exposure to ESG factors, and are in the process of refining our approach to this aggregate portfolio analysis. Where relevant, we may use research provided by third-party research specialists to analyze the risks and opportunities ESG factors may pose for our portfolios.
In partnership with our managers, we are conducting research to continue to evaluate the impact of ESG factors on investment portfolios and the most effective methods to address these issues. In addition to our manager due diligence process, once a manager has been approved for investment, we may negotiate provisions addressing whether and how ESG factors will be reflected in the construction of the portfolio; reporting on the impact of ESG factors within the portfolio; proxy voting; and any targets relating to ESG integration.
Best practices in ESG integration are continuously developing. That’s why we continuously reevaluate our approach to ESG integration through insight gained as a result of conversations with peers, involvement in industry working groups, and original research in partnership with our investment managers.
We set annual objectives for ESG activities and review our performance against those objectives at the end of each period. Additionally, we have an ESG policy officer who is part of the Asset Allocation Committee and reports to the senior executive group on a quarterly basis.
We were founded with the mandate to educate institutional investors on current best practices, which we provide through the Commonfund Institute. The institute serves as the center of our resource library, providing blog articles and white papers about ESG best practices, research about ESG factors, and events. The Institute also reports on responsible investing practices among leading nonprofits through the Commonfund Benchmarks Studies.
Launched in 2018, Commonfund’s Diversity, Equity and Inclusion Office was created with the mission to intentionally promote and foster inclusion and equity across Commonfund and its investment process, thought leadership, and professional and organizational development. As part of our commitment, the Commonfund Diverse Manager Portal is designed to broaden clients’ access to diverse investment talent through the receipt and review of due diligence materials from diverse managers across all global asset classes.
Truly responsible investing is impossible without an effective risk management strategy. Learn more about our approach to risk management and the ways we strive to create a secure investment plan for your organization.