1. Assess the Current Situation
We Begin by Understanding.
Whether your endowment or fund is new or established, it has unique characteristics that we first must understand in order to provide effective advice. To help establish a solid relationship, we listen first.
We explore your investment goals and objectives as well as expected cash flows, governing principles, growth expectations, and spending requirements to understand the unique characteristics that could affect selection of investments and the advice you receive. For existing portfolios, we evaluate your current managers and funds, and compare your current holdings to the asset allocation and risk parameters in your Investment Policy Statement. We determine whether your portfolio, as invested, is in compliance with your Investment Policy Statement.
By listening first, and understanding your larger picture, we can offer the relevant advice you seek, address your concerns and goals, and prioritize our recommendations by their potential to positively impact your investment performance.
2. Design or Review Investment Policy Statement
Investment Stewardship continues with the creation of or thorough review of your organization’s Investment Policy Statement (IPS).
We believe that an effective investment policy provides thoughtful, well crafted, non-conflicting policies and evaluation criteria to guide decisions in all market conditions.
Where the IPS is well established, the review might confirm that the IPS has been productive. For a newly established organization, we will provide the data the investment committee needs to craft an effective document. We seek to create a well designed IPS that balances an organization’s need to sustain precious resources for the future, while providing support and stability to today’s beneficiaries. Our review includes a comprehensive discussion of payout policy alternatives and methods to help the Investment Committee select payout guidelines that will best meet the organization’s mission and support anticipated cash flows.
Determining an appropriate asset allocation strategy that reflects your risk tolerance, investment goals, and payout polices is a key part of the Investment Policy Review.
3. Implement the Portfolio
We implement portfolio recommendations with sensitivity to minimizing the unexpected consequences of a portfolio transition.
Our recommended implementation plan will use managers that carefully match each recommended asset allocation category and that pass strict due diligence requirements for consistency of performance and style as well as for cost effectiveness. We also review your existing managers against these criteria and identify those you may wish to review. We can continue to work with existing managers that meet your requirements in order to minimize the unexpected consequences of a portfolio transition.
Where appropriate, we recommend investing with a minimum of two managers representing complementary approaches to that particular style category– for example a fundamental and quantitative pair of managers for growth equities. We find that this has significant potential to enhance returns and reduce volatility, while still maintaining compliance with your IPS.
You may choose to use our affiliate, Mason Securities, Inc. to implement your portfolio or we can work with your existing custody agents.
We are an independent company that puts our customers’ interests first. We do not use proprietary products or managers with hidden fees or expenses, or consider the availability of trailer compensation in developing our recommendations.
4. Monitor, Manage and Report
Once implementation is complete, we continually monitor portfolio performance, recommend rebalancing when appropriate, and provide convenient, consolidated reporting and on-going operational support.
- Consolidate information from most major custodians and provide timely, convenient reports;
- Reduce your internal reporting workload so you can focus on effective oversight;
- Proactively identify issues that require attention and recommend appropriate solutions that are consistent with your Investment Policy;
- Track and review managers and funds monthly against our strict set of performance and qualitative criteria to provide timely indications of when a manager should be evaluated for possible replacement, and
- Recommend rebalancing or other portfolio adjustments when indicated by your Investment Policy.
With the right information, presented in a timely, comprehensible way, your Investment Committee can focus on policy and on ensuring compliance, and your staff can focus on your mission.