Insights Blog

What’s in the Data? HEPI 2018 Highlights

Posted by Commonfund Institute on Dec 26, 2018

Topic: Governance and Policy

Commonfund Higher Education Price Index (HEPI) 2018 shows that inflation for colleges and universities was 2.8 percent for fiscal year 2018, a decline from last year’s 3.3 percent but higher than the average for the preceding five fiscal years. Additionally, costs rose in all eight components tracked by HEPI. HEPI is an inflation index designed specifically for use by institutions of higher education. Compiled from data reported by government agencies and industry sources, HEPI measures the average relative level in the price of a fixed market basket of goods and services purchased by colleges and universities each year through current fund educational and general expenditures, excluding research. Highlights of the 2018 Study ....

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Bah Humbug…No Presents from the Fed This Year

Posted by Ryan Driscoll on Dec 19, 2018

Topic: Market Commentary

But at least it’s not the Grinch Who Stole Christmas...Recent volatility in the financial markets and a bit of softer inflation data had investors hoping for a holiday season treat from the FOMC in December. An immediate pause in interest rates was very unlikely, but some guidance towards a slower pace in...

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Identifying an “E” Factor

Posted by Commonfund on Dec 11, 2018

Topic: Responsible Investing

Over the past year the Commonfund investment teams have undertaken research to identify and isolate a new factor associated with the environmental sustainability of a stock (or a portfolio of stocks). Identifying and valuing the impact of ESG factors on performance and risk is particularly difficult. There are two important reasons to pursue this objective...

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Applying the Endowment Model to Diversity and Inclusion

Posted by George Suttles on Nov 29, 2018

Topic: Responsible Investing

Commonfund recently launched a Diversity Office, a formal, cross departmental effort focused on diversity and inclusion. The mission of the Commonfund Diversity Office is to intentionally promote and foster institutional racial and gender equity through our investment processes, thought leadership, and professional and organizational development. As a new Managing Director at the Commonfund Institute, and a member of the Diversity Office, I have been thinking about how our firm can effectively develop and implement strategies focused on fostering diversity and inclusion...

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Three Reasons Investors Should be Optimistic

Posted by Ryan Driscoll on Nov 9, 2018

Topic: Market Commentary

The markets are certainly making investors uncomfortable lately. However, market corrections, especially late in the cycle should be expected and can be healthy. We have experienced five sell-offs (and recoveries!) of similar magnitude in the last five years. Unfortunately, 2018 brought the markets back to a more normal level of volatility after investors were lulled into a sense of riskless comfort in 2017. Despite the recent market instability, we still see three reasons to be optimistic...

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A Cost Effective Approach to Hedge Funds Allocations: Part 2

Posted by David Scarozza on Oct 11, 2018

Topic: Hedge Funds

Investors often pay “2 and 20” for hedge funds that deliver significant market return (beta), not manager skill (alpha). We seek “alpha-only” strategies in hedge funds while sourcing beta exposure more cost-effectively. Relative to peers, we advocate for a lower asset allocation to hedge funds.

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A Cost-Effective Approach to Hedge Fund Allocations: Part I

Posted by David Scarozza on Oct 1, 2018

Topic: Hedge Funds

Hedge funds are not an asset class. Hedge funds do, however, warrant a slice of an institution’s asset allocation pie – but not for beta exposure. We aim for pure alpha from our hedge funds and believe that the return, risk and correlation characteristics we can get from following this approach merit a strategic allocation of capital to hedge funds. Our approach to hedge fund usage is atypical in the industry. Broadly speaking, the institutional investing community accesses..

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Are You Ready for the Next Crisis?

Posted by Timothy T. Yates, Jr., Deborah Spalding on Sep 18, 2018

Topic: Investment Strategy

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. The good news is that markets have been relatively calm since the fall of 2008. The bad news is that another crisis will inevitably upset the financial markets. And so on the 10-year anniversary of Lehman, we should ask ourselves, are we ready for the next financial pothole? At Commonfund, we are working with clients to develop a road map, or “crisis playbook"...

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7 Major Findings – Commonfund Benchmarks Study of Healthcare Organizations

Posted by Commonfund Institute on Sep 11, 2018

Topic: Industry Knowledge

Participants in the latest Commonfund Benchmarks Study® of Healthcare Organizations reported an average investable asset pool of $2.1 billion as of December 31, 2017, and median investable assets of $987.0 million as of the same date. The Study separates data from the 56 participants into three size cohorts: institutions with investable assets over $1 billion; those with investable assets between $501 million and $1 billion; and those with investable assets under $501 million. Following is a summary of the major findings in the report.

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The U.S. Economy: Still Looking Strong

Posted by Ryan Driscoll on Aug 16, 2018

Topic: Market Commentary

Mid-year has come and gone and until recently the markets were behaving like it’s 2017 all over again. Through July, the S&P 500 Index has had four straight months of gains. U.S. Treasury yields are relatively contained and the 10-year bond seems to have found resistance at the 3 percent level. Lastly, it seemed as though the spike in volatility that we saw early in the year had subsided

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