Endowments and Foundations - Articles & White Papers
Institutional research and articles covering investing at university endowments, foundations, non-profits and charities. These papers will be of particular interest to university endowment CIOs and other senior endowment investment management staff. A number of white papers examine endowment asset allocation - examining the so-called "endowment model" pioneered by the Harvard and Yale university endowments, represented by a well-diversified portfolio with a relatively high asset allocation to alternative investments. Other popular papers examine trends in university endowment investing and other drivers of endowment asset allocation.... Other topics of inveterest to endowment CIOs include university endowment investment performance and the potential for endowment investments to impact the world positively, investing according to an ESG or SRI philosophy. A key challenge for university endowments, foundations and charities is to withdraw cash in a sustainable manner, and a number of reports look at sustainable "withdrawal rates". A number of broader investment concepts are considered from an endowment/foundation perspective, such as the outsourced chief investment officer (O CIO) model, risk management and active equity investment. Further research articles and surveys in this section cover issues related to endowment investment performance, investment risk tolerance, and strategies for nonprofit institutional investors. This endowment investing topics tends to be followed not just by university endowment CIOs and senior investment staff, but also by those who are seeking to market investment products to endowment funds.
MFS surveyed over 540 asset owners, including DB and DC pension plans, endowments, foundations, and sovereign wealth funds, all of whom had a minimum of $100 million of institutional assets under management. Key themes of the survey include: the demise of the current US bull market, confidence in asset management,…
Endowments are a substantial category of institutional investors. Some of these have been on the forefront of moving into new asset classes and new strategies, outperforming many other investors. What are the factors of success and lessons learned?
This study provides an important extension of existing research on the performance of options-based strategies by considering the impact of the inclusion of option-based equity strategies in diversified institutional portfolios. Specifically, the analysis assesses the historical impact of the application of rules-based…
This brief argues that, counter to common practice, trustees should turn their backs on market values and instead focus on the real cash flows that their assets can generate. For bonds, this would mean their real interest rate. For equities, this would mean their underlying profits. This focus on asset cash flows, rather…
Many research papers have demonstrated the shortcomings of popular spending rules—specifically, the tendency for rules to cause a loss of purchasing power over time. This study identifies the negative correlation between portfolio purchasing power and recommended spending rates as the primary cause of these shortcomings and…
What trends are influencing endowment investing in today’s market? Christopher K. Merker, PhD, CFA of Robert W. Baird & Co discusses this in this brief blog post.
FTSE Russell’s sixth annual global institutional smart beta survey shows more asset owners combining sustainability parameters and risk premia within a single index—an approach we refer to as “Smart Sustainability.” Yet Europe is clearly leading the way globally; 77% of European asset owners expressed interest in applying…
The findings of our latest annual global survey of smart beta usage by asset owners (with a collective AUM of over $5 trillion), suggests that smart beta is now a standard tool in investors’ armories. For the first time, we found that the majority of asset owners—government organizations, corporations, unions, insurance…
In our last newsletter we looked at the number of women CIOs at big endowments*. Among 109 North American endowments over $1 billion we identified 20 (including one female director of investments and one CFO who liaises with their OCIO providers). That’s just eighteen percent – less than one out of five. For this issue we…
Why doesn’t the Modigliani-Miller theorem apply to the relationship between endowments (“firms”) and donors (“shareholders”), rendering an endowment’s investment policy neutral? We show that donor altruism (even if impure) breaks neutrality. Under a condition—which quickly converges to standard DARA preferences in the number…
Charities continue to face financial challenges at the moment with fundraising and contracts under pressure, and the need for transparency becoming ever greater. Layered on top of this is a significant DB burden for many charities, with regulatory pressure to pay off pension deficits more quickly. We’ve analysed the DB…
This study provides an important extension of existing research on the performance of options-based strategies by considering the impact of the inclusion of option-based equity strategies in diversified institutional portfolios. Specifically, the analysis assesses the historical impact of the application of rules-based…
The degree of involvement of institutional investors with cryptocurrencies has been widely discussed since the appearance of digital assets on the radar of financial markets over the past two to three years. The stance of asset managers, pension funds and hedge funds has been assessed, but the appetite and activity of…
The choice to use the services of an Outsourced Chief Investment Officer (OCIO) provider is one of the most significant decisions that a board is likely to make. This piece is focused on the four most important rules that Verus believes investors should understand, and OCIO providers should deliver upon.
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