Research

Keeping Underwater Endowments Afloat (and the Programs They Support)

When endowment funds slip “underwater” (below the historic dollar value of the original gift), institutions face a tradeoff between distributing anticipated budget support and restoring the endowment to its original value. Ultimately, the choice of underwater policy depends on the situation and needs of each institution in balancing endowment preservation with program support.

The 15 Percent Frontier

With virtually limitless choices along the asset allocation spectrum, an allocation to private investments greater than 15% has served many investors well. Are you on the right track?

CA Perspectives: Spring/Summer 2016

The spring/summer issue of CA Perspectives puts private investments in focus. In “Private Investments Are More Accessible Than You Think,” Craig Smith and Jill Shaw explain why private investing isn’t just for the largest investors. David Thurston and David Shukis discuss why investors with more than 15% in private investments have been the top performers over the long term in “Cambridge Conversations.” In “The Search for Tax-Efficient Alpha,” Philip Walton shares why private investments offer unique benefits for private investors. Our client profile of The Grantham Foundation for the Protection of the Environment, highlights how the Foundation uses private investments for returns and impact.

Hedge Fund-ing the Pension Deficit

Select hedge funds have provided attractive long-term returns with reduced equity beta and can be integral to pension investment strategies.

The Foundation of Good Governance for Endowments and Investment Committees

To create the conditions for good governance, endowments should assess whether they have in place the appropriate model for portfolio oversight and management, are upholding their fiduciary responsibilities, and are learning about peer best practices in structure, process, policies, and role of the portfolio.

Pondering the Consequences of “Brexit”

As the cacophony surrounding the 23 June “Brexit” referendum grows, just how much the United Kingdom stands to lose or gain from leaving remains unclear, and investors with substantial exposures to British assets would do well to pay attention to sentiment.

CA Perspectives

In this issue we discuss why hedge funds continue to be an important component of diversified portfolios and what it takes to find the top-performing funds; analyze conventional wisdom on hedge fund success factors to examine which rules of thumb hold water and which have some leaks; provide insights on tax-efficient hedge funds for private client investing, highlight David Druley’s new role as President and Head of Global Investments, and profile Main Line Health.

Are Your Reserves Long-Term Capital?

Determining the appropriate size of near-term reserves and how to invest any remaining reserves is more art than science and requires careful consideration of a number of factors.

Outlook 2016: Do You Know Where Your Risk Tolerance Is?

Every year, we take a fresh look at the themes and drivers likely to influence capital markets and, along with our valuation analysis, inform our asset allocation recommendations. In this report, we focus on three key areas for investors’ portfolios: (1) developed markets equities, where the stage appears set for more US underperformance; (2) emerging markets equities, where risks are foremost in investors’ minds and where we continue to see opportunities for investors that can focus on the horizon rather than the waves; and (3) commodity-related assets, which suffered mightily in 2015 and may not be quick to recover.

Risks and Opportunities From the Changing Climate: Playbook for the Truly Long-Term Investor

Considering climate factors is an economic risk management and opportunity capitalization issue core to prudent investing for the long term. In Part I: Risks and the Playbook for Defense, we discuss the potential risks that climate change can inflict upon certain sectors and asset classes and outline corresponding strategies to defend against those risks. In Part II: Opportunities and the Playbook for Offense, we review the thematic areas across public and private asset classes to proactively capitalize on the evolving opportunity set within the “resource efficiency” sector. Overall, the key for long-term investors is to develop a cohesive and customized strategy that fits their beliefs, motivations, and governance structures.