Endowments and foundations investment management

With a truly long-term investment horizon and limited liquidity needs, endowments and foundations can take advantage of their unique position in the investment arena.

They balance their investment objectives and risk appetite between a desire to generate cash flow for grants, grow their investment portfolio and a responsibility of preserving their capital to enable them to deliver on their mission over the longer term.

What is endowment and foundations investment management?

Endowments and foundations investment management refers to the specialised management of investment portfolios. Their investment management strategies are designed to align with their missions, financial needs, and risk tolerance.

What do you need for foundation and endowment investing?

Generating a regular income or cash flow is essential for endowments and foundations in order to be able to pay grants to the projects they finance without interruption. Therefore, the expected return and risk of the investment portfolio should be well-calibrated to ensure stability and continuity.

The return objective will mostly be expressed as a certain percentage above inflation as the capital needs to be at least preserved in real terms to ensure long term delivery to the mission of the organisation. 

Given their long-term nature and less regulated environment, endowments and foundations have much more freedom in the way they invest compared to other asset owners. They can accept to invest larger portions in illiquid assets, private markets and new types or niche asset classes in order to capture risk premia not always accessible to other investors. 

What are the benefits of foundation and endowment investing?

There are a few benefits of foundation and endowment investing, these range from showcasing expertise to enhanced business portfolio opportunities. Below are a few examples of those benefits: 

• Market expansion - expanding into the nonprofit sector diversifies your market presence and reduces susceptibility to economic downturns in other sectors.
• Customised solutions - tailoring your services to meet the unique needs of endowments and foundations showcases your ability to provide bespoke solutions, potentially attracting more clients seeking personalised advisory services.
• Client diversification - partnering with endowments and foundations can diversify your client base beyond traditional corporate clients, reducing dependency on a single sector.

We assist boards, investment committees, Chief Investment Officers and in-house investment teams with a variety of services, from clarifying objectives and investment beliefs, to defining asset allocation and strategy, and selecting the right managers and monitoring them.

By working in partnership with our clients, we deliver a clear, long-term, bespoke and integrated investment service that allows you to make decisions in an informed and timely manner.

Our dedicated endowments and foundations investment team has a long track record in advising endowments and foundations with their investment arrangements in the UK, Europe and the Middle East.

In conclusion, endowments and foundations investment management presents diverse opportunities. It allows for diversification, showcases expertise, offers tailored solutions, and opens doors to long-term partnerships and market expansion. This engagement reflects a commitment to responsible finance and benefits both the consultancy and the nonprofit sector it serves.

Want to know more about investing, and where best to do this? Take a look at our article on investing in agriculture, next.