Having spent more than 20 years providing institutional consulting services to endowments, foundations, non-profits, municipalities and other corporate defined benefit plans, our advisors know that every institution requires customized solutions because every institution has its own unique mission. So we make it our business to understand yours.
What are your goals, values and guiding principles? How do you make investment decisions? Are there any ethical or philosophical considerations? These are just a few of the questions we ask in order to gain a clear understanding of your organization’s particular needs and how to best meet them.
Working with your trustees, directors and investment committee members, we function as your outsourced CIO and fiduciary, customizing investment solutions and providing discretionary or non-discretionary management and fiduciary oversight. Most importantly, you can count on us to never lose sight of your vision or purpose. Using our deep expertise and access to resources, research services and a full range of investment vehicles, we’ll do everything we can to help your institution achieve its mission, now and in the years to come.
INVESTMENT POLICY STATEMENTS
What is your institution’s spending policy? How are investment benchmarks selected? What are your allowable risk levels?
All of this is spelled out in the Investment Policy Statement. The IPS is the who, what and why of how a board selects suitable investments, providing the framework for a cohesive investment program.
Too often, we see spending rates (the amount the institution withdraws annually) that are not sustainable over the long term. We also see benchmarks that are not appropriate comparisons. For example, it makes no sense to compare the S&P 500 to a portfolio made up of 50% equities, 40% fixed income and 10% cash equivalents. As institutional advisors and fiduciaries, we use appropriate blended benchmarks. The IPS serves as the roadmap, defining everything from your institution’s investment objectives, risk tolerance levels and allowable investments to performance benchmarks, guidelines for investment manager selection and target asset allocation.
ASSET ALLOCATION SERVICES
Is your asset allocation on point? Do you have investment bands in place?
Determining the optimal asset allocation is one of your board‘s most important decisions, as it is arguably the key driver of your long-term investment return. Too often, however, we see a static 60% equity/ 40% fixed income allocation with no ranges or bands.
Given that certain market conditions necessitate a more aggressive strategy, while other situations require a more defensive approach — in customizing your asset allocation to align with your objectives, we strive to put investment bands in place. We then stress test the asset allocation to help identify potential trouble spots and assist board members in acclimating to the level of risk they have chosen.
MANAGER SELECTION & DUE DILIGENCE
How thorough is your criteria for selecting investment managers?
Our institutional investment team manages the process for selecting the appropriate mutual fund, exchange traded fund or Separate Managed Account (SMA). We use an independent screening process that measures various criteria to select the appropriate investment ingredients. Only fund managers whose investment processes align with your objectives and who have a proven track record are considered. Candidates are thoroughly researched and interviewed, and subject to a comprehensive due diligence process to verify information.
PLAN COMMITTEE MEETINGS
How informed are the members of your board and investment committee?
We strive to keep members involved and up to speed by holding plan committee meetings. Our team will review your portfolio and Investment Policy Statement, making sure they’re aligned — and discuss with you everything from fund selection and board and plan governance to performance reports and benchmarking fees. We make keeping your members informed a priority and do our best to help them get the most out of these meetings.
PERFORMANCE REPORTING & MONITORING
How is your portfolio doing relative to its benchmarks? How is it doing relative to similar size groups and plans? Should a fund be placed on watch?
These are the reasons why we utilize a robust reporting system to monitor your plan. From a portfolio overview to the performance of a specific fund and manager, you’re able to assess your plan’s results in both absolute and relative terms. And determine whether you’re on track to achieving your goals.
FEE BENCHMARKING
Are your fees in line with other plans? Which services cost extra and what are those charges? How much are you paying in fees overall, including investment advising and portfolio management?
We believe that every board should know and understand what they are paying for and why. We also believe in full transparency and disclosure of fees. That’s why every year, we aim to benchmark your plan against other similar plans, so you can compare the fees you pay with the services and value you receive.
